Sun Microsystems, IBM talking merger

Sign outside of the Sun Microsystems headquarters in Santa Clara, Calif.

TEXT OF STORY

Renita Jablonski: A lot of computer system companies are still trying to recover from the dot-com bust. The current recession has spurred a wave of industry consolidations. The latest possibility is an IBM takeover of Sun Microsystems. Marketplace's Janet Babin reports from the Innovations Desk at North Carolina Public Radio:


Janet Babin: IBM's acquisition of Sun Microsystems would be a natural fit. Analysts say there's a synergy between the two companies: both offer products that don't rely on Microsoft Windows and both back open source software systems.

Richi Jennings is an analyst at Ferris Research:

Richi Jennings: You know, there's a lot of commonality between the way IBM looks at the world, and the way Sun looks at the world. You know on the downside, there's going to be some pains for IBM to absorb Sun.

That pain would start with a cash outlay. The Wall Street Journal reports that IBM would pay more than $6.5 billion dollars for Sun. That would be more than a 100 percent premium over Sun's latest stock price. But the deal could bolster its computer server products against competitors, and help it become a one-stop shop for computer hardware or software services.

I'm Janet Babin for Marketplace.

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