January 24, 2010
By

D.H. Kass

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Oracle Corp. secured unconditional approval from the European Union to proceed with its $7 billion acquisition of Sun Microsystems Inc., completing an examination begun by the regulatory board last September that required the database vendor to satisfy concerns that the takeover would impede competition.

“I am now satisfied that competition and innovation will be preserved on all the markets concerned,” said Neelie Kroes, EU competition commissioner.

“Oracle’s acquisition of Sun has the potential to revitalize important assets and create new and innovative products,” Kroes said.

In granting Oracle clearance to complete the transaction, the EU pointed to the vendor’s pledges to Sun’s MySQL customers, developers and users to release future versions of the software under open source license, and to amend contracts with existing licensees to ease third-party development.

In reviewing the acquisition, EU regulators initially suggested that the combination of Oracle’s database products and Sun's MySQL open source database could tilt that segment's competitive landscape and result in artificially higher prices.

The EU said that its investigation focused on the “nature and extent of the competitive constraint that MySQL currently exerts on Oracle and whether this would be affected by the proposed transaction.”

It concluded that while Oracle and MySQL compete in some segments of the market, the two do not vie for business in other segments, particularly at the high end.

Last August, Oracle received regulatory approval from the U.S. Department of Justice to proceed with the acquisition, and, in December, addressed the competitive concerns raised by the European Commission, a unit of the EU comprised of 27 commissioners that handles the Union's day-to-day affairs.

At one point in the proceedings, the U.S. Department of Justice took the unusual step of posting a statement re-affirming its approval of the acquisition.

Larry Ellison, Oracle chief executive, is slated, along with Sun executives, to present at public briefing this week the combined company’s strategy to implement its product portfolio, drive innovation, simplify IT management and integrate its wide variety of offerings.

TAGS: Sun Microsystems, open source, Oracle, European Union, acquisition

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