The European Commission has approved the acquisition of server and software player Sun Microsystems by business software giant Oracle for about US$7.4 billion.
The Commission concluded, after an in-depth examination launched in September 2009, that the Oracle/Sun transaction would not significantly impede competition in the European Economic Area (EEA).
Commission’s concern
The main concern for the Commission was that the deal, which was announced in April 2009, would bring together two major competitors in the market for databases. The database market is highly concentrated with the three main proprietary database vendors – Oracle, IBM and Microsoft – accounting for about 85pc of the market in terms of revenue.
The Commission’s investigation of the deal assessed whether the acquisition of Sun, which owns the world’s leading open-source database MySQL, by Oracle, the leading proprietary database vendor, would lead to a reduction in competition in the database market.
It determined that although MySQL and Oracle compete in certain parts of the database market, they are not close competitors in others, such as the high-end segment.
A constraint
The Commission also assessed Oracle’s ability and incentive to remove the constraint exerted by MySQL after the merger and the extent to which this constraint could, if necessary, be replaced by other actors on the database market.
It found that another open-source database, PostgreSQL, is considered by many database users to be a credible alternative to MySQL and could be expected to replace to some extent the competitive force currently exerted by MySQL on the market.
“I am now satisfied that competition and innovation will be preserved on all the markets concerned. Oracle’s acquisition of Sun has the potential to revitalise important assets and create new and innovative products,” said EU competition commissioner Neelie Kroes.
After several months of investigation, the US Department of Justice cleared Oracle’s acquisition of Sun last August.
Oracle said today it now expects unconditional approval from China and Russia and intends to close the transaction shortly.
Article courtesy of Businessandleadership.com
