IBM walks away from Sun deal

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IBM has reportedly withdrawn its offer for rival systems supplier Sun Microsystems, as the two sides failed to agree a price.

The New York Times cites three sources close to the deal that said IBM has walked away after failing to convince Sun’s board to accept its $7 billion (€5.2 billion) offer.

IBM is believed to have made an initial offer for Sun worth $9.55 per share, but subsequently cut that to $9.40 (€7), after its lawyers pored over the details.

Any deal could have been subject to a potentially lengthy anti-trust review. Both Sun and IBM compete in the enterprise server market, and competition regulators may have been concerned had IBM acquired ownership of Java.

Failure to secure a deal will raise questions over the future of Sun. By entering into negotiations, its board has potentially signalled a lack of faith in its ability to operate as a standalone company.

Over the years Sun has developed some industry-changing technology, said Simon Holloway, practice leader at analyst Bloor Research: “But they did know how to exploit it.”

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