EU Showdown over Oracle-Sun: Objections Seem Imminent

Oracle (ORCL) is reportedly gearing up for a formal rejection by European regulators of its bid to acquire Sun Microsystems (JAVA), according to a report in the Financial Times. An official statement of objection, the first step in blocking the $7.4 billion deal, could come as early as this week - but Oracle seems to be taking a wait-and-see approach before it makes another move.

A source tells the Financial Times that Oracle has refused to offer any concessions to regulators in Europe. Following the official statement, however, Oracle would have the chance to offer concessions or even wage a legal battle, a process that would extend a delay that’s already costing both money and jobs.

The U.S. Department of Justice has already given its blessings to the deal but the EU has expressed concerns over the future of MySQL. Opponents see the open source software as an eventual competitor to Oracle’s core business. But the company has said that it will continue to invest in MySQL.

Sun, which was already a financially-troubled company when Oracle made its acquisition bid, recently laid off 3,000 employees as part of a restructuring plans that stems from delays in regulatory approval. Oracle CEO Larry Ellison recently said that delays are costing about $100 million per month.

Comments

[FredStein:]

Do the EU regulators seriously suggest that ORCL would kill off or starve MySQL? Oracle bought innodb a while back. It is a good business and highly complementary. The market created by MySQL will not go away nor migrate to other Oracle databases, since alternatives exist and/or would be created by entrepreneurs and VCs.

What is the real issue for the EU regulators? I mean this as a serious question, and would love to hear insights.

Nov 04 06:18 PM

[BeachRider:]

Since the EU regulators are effectively causing JAVA to 'twist in the wind', I submit that JAVA will be released from the Oracle acquisition. This should please the EU regulators.

I don't know what happens next for JAVA, though. Those 3K of new layoffs is only the tip of the iceberg unless another white-knight comes along.

I also don't-get how this EU action protects any current users of MySQL. It will continue to lose-staff and lose effectiveness under this EU magistration.

Nov 05 02:13 PM