Acquisition of Sun Microsystems by Oracle Corporation

The acquisition of Sun Microsystems by Oracle Corporation was completed on January 27, 2010.[1] After the acquisition was completed, Oracle, only a software vendor prior to the merger, owned Sun's hardware product lines, such as SPARC Enterprise, as well as Sun's software product lines, including the Java programming language.

Concerns about Sun's position as a competitor to Oracle were raised by antitrust regulators, open source advocates, customers, and employees over the acquisition.[2] The European Commission delayed the acquisition for several months over questions about Oracle's plans for MySQL, Sun's competitor to Oracle Database.[3] The DG COMP of the European Commission finally approved the takeover, apparently pressured by the U.S. DOJ Antitrust Division to do so, according to a diplomatic cable leaked in September 2011.[4]

History

In 2006, it was disclosed that Sun and Apple have discussed a merger on multiple occasions.[5]

In late 2008, Sun was approached by IBM to discuss a possible merger.[6] At about the same time, Sun also began discussions with another company, widely rumored but not confirmed to be Hewlett-Packard, about a potential acquisition. By March 2009, talks had stalled between Sun and both IBM and the other potential suitor.

On April 20, 2009, Sun and Oracle announced that they had entered into a definitive agreement under which Oracle would acquire Sun for $9.50 a share in cash. Net of Sun's cash and debt, this amounted to a $5.6 billion offer from Oracle. Sun's shareholders voted to approve the proposal on July 16, 2009, although the deal was still subject to regulatory approvals.[7] The terms of the agreement between Oracle and Sun included dependencies on the antitrust laws of "the United States and Canada, European Union, China, Israel, Switzerland, Russia, Australia, Turkey, Korea, Japan, Mexico and South Africa".[8]

On August 20, 2009, the U.S. government, pursuant to the Clayton Antitrust Act, approved Oracle's purchase of Sun.[9]

On September 3, 2009, the European Commission announced that it would not immediately approve the deal, but would instead perform a second round of investigation, focusing on the implications of Oracle's control of MySQL (acquired by Sun in 2008).[10]

On October 20, 2009, Sun filed with the U.S. Securities and Exchange Commission (SEC) its intention to cut 3,000 jobs globally over next 12 months, citing losses caused by delays in the acquisition process.[11]

On November 6, in its 10-Q filing for the 1st quarter of the 2010 fiscal year, Sun announced a 25% total revenue decrease compared to the 1st quarter of the previous year, due to "economic downturn, the uncertainty associated with our proposed acquisition by Oracle, increased competition and delays in customer purchasing decisions".[12]

On January 21, 2010, EU Competition Commissioner Neelie Kroes announced unconditional approval of the deal.[13]

On January 27, 2010, Oracle announced that it had completed the acquisition.

Java Android lawsuit

Oracle filed a patent infringement lawsuit against Google over its use of Java in the Android platform. Android apps run in the Dalvik Java virtual machine. The apps are written in Java but are compiled into Dalvik's custom bytecode format which is incompatible with standard Java runtime environments.[23] Google thus avoided licensing fees associated with J2ME, the mobile version of Java. However, aspects of the Dalvik system are very similar to the Java technology patented by Sun and now Oracle.[24]

The court found that Oracle's primary copyright claim, based on the Java Application Programming Interface (API), failed because the portions Google reused were not copyrightable.[25] Google was found liable for a small amount of literal code copying. Oracle was limited to statutory damages for these claims.[26] The jury found that Google did not infringe Oracle's patents.[27] Oracle appealed to the Federal Circuit, and Google filed a cross-appeal on the literal copying claim. The hearing was held on December 4, 2013, and the judgement was released on May 9, 2014. The circuit court reversed the district court on the central issue, holding that the "structure, sequence and organization" of an API was copyrightable. It also ruled for Oracle regarding the small amount of literal copying, holding that it was not de minimis. The case was remanded back to the district court for reconsideration of the fair use defense.[28]

A jury determined in 2016 that Google's use of Oracle's APIs was legal under the copyright law's fair use doctrine. Oracle appealed the decision. On March 27, 2018, an appeals court ruled Google violated copyright laws when it used Oracle's open-source Java software to build the Android platform in 2009. "There is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform," a panel of three Federal Circuit judges concluded.[29]

The Supreme Court issued its decision on April 5, 2021. In a 6–2 majority, the Court ruled that Google's use of the Java APIs was within the bounds of fair use, reversing the Federal Circuit Appeals Court ruling and remanding the case for further hearing.[28]

initiator	Oracle Corporation
target	Sun Microsystems
type	Full acquisition
cost	$7.4 billion (value) $5.4 billion (net cash / debt)
initiated	April 20, 2009
completed	January 27, 2010

Acquisition of Sun Microsystems by Oracle Corporation

History

Resignations

OpenSolaris and Solaris

MySQL petition and forks

Java Android lawsuit

Apache Software Foundation resignations

OpenOffice resignations and forks

Hudson/Jenkins fork

Grid Engine

Program closures

Customer relations

Virtualization

See also

References