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Oracle-Sun Makes Progress with EU

BRUSSELS (Reuters) – EU regulators signaled they could clear Oracle Corp’s $7 billion takeover of Sun Microsystems Inc, after the U.S. software company promised measures to ease competition concerns. The European Union’s executive European Commission said it was optimistic a “satisfactory outcome” was possible. It had previously objected to the deal, citing possible competition constraints […]

Written By

DS

Datamation Staff

Dec 14, 2009

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BRUSSELS (Reuters) – EU regulators signaled they could clear Oracle Corp’s $7 billion takeover of Sun Microsystems Inc, after the U.S. software company promised measures to ease competition concerns.

The European Union’s executive European Commission said it was optimistic a “satisfactory outcome” was possible. It had previously objected to the deal, citing possible competition constraints on Sun’s MySQL database after the takeover.

Shares of Sun jumped 10 percent to $9.20 in U.S. premarket trading, compared to their Friday close on Nasdaq of $8.36.

The Commission has until January 27 to clear or block the deal. Its approval would avert a rift with the U.S. Department of Justice, which has approved the deal.

Oracle promised on Monday to keep the market open for others to make storage engine software for the MySQL database, said that it would be more open than MySQL’s previous owners, and would not ask for commercial licenses from makers of MySQL storage engines for application programing interfaces.

Oracle also said it would invest more in MySQL research and development over the next three years than Sun has, and said it would set up a separate customer advisory board of MySQL users.

The Commission said in a statement that Oracle’s binding contractual undertakings were “significant new facts.”

“Competition Commissioner Neelie Kroes … is optimistic that the case will have a satisfactory outcome, while ensuring that the transaction will not have an adverse impact on effective competition in the European database market,” it said.

The U.S. Department of Justice said last month the takeover was unlikely to be anticompetitive, after Kroes objected to the deal. Her spokesman said the U.S. comments were “unusual.”

MySQL has been a rare major newcomer to the global database market — dominated by technology heavyweights Oracle, IBM and Microsoft — pushing down prices of databases and their maintenance.

CRITICS SAY CHANGES JUST COSMETIC

Oracle, the world’s biggest database software maker, had to submit final proposals to address the Commission’s concerns by the end of Monday.

Critics of the deal said Oracle’s proposals would not resolve competition concerns.

“This is purely cosmetic, totally ineffectual. Neither storage engine vendors nor ‘forkers’ — developers of derived versions — nor enterprise users would have a basis on which to invest in MySQL-related innovation,” Florian Mueller, a spokesman for MySQL founder Michael Widenius, said.

Widenius, one of the most respected developers of open-source software, launched an Internet campaign over the weekend to try to line up MySQL users to stop the deal.

He was responding to Oracle mobilizing its big customers to tell the Commission at a hearing last week that the takeover was not anti-competitive.

Oracle also said it would create and fund a customer advisory board “no later than six months after the anniversary of the closing” to provide feedback on MySQL development priorities.

It said it was committed to making appropriate funding available for MySQL’s continued development.

“During each of the next three years Oracle will spend more on research and development for the MySQL Global Business Unit than Sun spent in its most recent fiscal year ($24 million) preceding the closing of the transaction,” Oracle said.