IBM is in talks to buy Sun Microsystems

IBM is still in talks to buy Sun Microsystems Inc and discussions could take some more time as IBM studies various parts of Sun's computer server and software businesses, according to people with knowledge of the matter. Currently IBM is examining the terms of Sun's various technology licenses to check for any conflict with IBM's business.

If they reach agreement, Sun would be IBM's largest acquisition and bolster its offering of computer hardware, software and services.A combination of the world's No. 1 and No. 4 makers of server computers, however, could draw antitrust scrutiny from regulators in the United States and abroad, analysts said this week.The merged company would hold 65 percent of the $17 billion market for Unix servers, which major companies and governments rely on for critical operations, according to market researcher IDC. IBM and Sun were the top two players in that market in 2008, with 37 percent and 28 percent respectively.Hewlett-Packard Co (HPQ.N) was third, with 27 percent. Some analysts also have said that IBM, with greater manpower and more effective management, may be able to make better use of Sun's assets.

But there is a question whether it is worth IBM paying what would amount to a 100 percent premium for Sun ( a deal could be worth $6.5 billion to $8 billion), whose shares had plunged in the past year before.



IBM and Sun declined to comment....

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