IBM Sun deal hits delays

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IBM Sun deal hits delays

The proposed IBM Sun deal is still on but discussions could take several more days as IBM lawyers perform due diligence, according to Reuters.

The news service sourced “people with knowledge of the matter”, saying that a deal is unlikely to be struck before next week at the earliest, as IBM looks at various parts of Sun’s software and server business.

But the move could raise anti-trust concerns among US regulators, the report said.

Sun and IBM together have 65 percent of the US$17 billion market for Unix servers, which are mainly used by large enterprises and government organisations.

IBM still leads the server space with nearly a third of the market, followed by HP, Dell and Sun.

Sun has been seen by analysts as vulnerable to acquisition for some time now, given that it has never been fully able to monetise its technology assets and recover from the drop in demand in its high-end servers at the beginning of the decade.

According to the Wall Street Journal, IBM may offer nearly double Sun's Tuesday closing share price of US$4.97, in a cash deal totalling around US$6.5 billion.

The Journal said that IBM is examining the terms of Sun's various technology licenses to check for any conflict with IBM's business.

Sun shares closed Friday's session down 6.14 percent at US$8.10 on the Nasdaq, giving the company a value of about US$6 billion.

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