REDWOOD SHORES, Calif., April 20 (UPI) -- Oracle Corp. said it had agreed to purchase Sun Microsystems for $7.4 billion, merging two U.S. technology giants.
Taking out Sun's cash and debt, the deal was valued at $5.6 billion, the companies said in a statement.
The announcement of a "definitive agreement" comes two weeks after Sun broke off discussions with International Business Machines for a deal that was valued at about $7 billion.
The current deal values Sun's common shares at $9.50 per share, the statement said.
Oracle President Safra Catz said the deal would contribute over $1.5 billion to Oracle's operating profit in the first year, "increasing to over $2 billion in the second year."
Oracle's Chief Executive Officer Larry Ellison said the acquisition "transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems."
Oracle's key acquisitions in the deal include two Sun software assets, Java and operating system Solaris.
Java is "the most important software Oracle has ever acquired," allowing Oracle to "ensure continued innovation and investment in Java technology," the statement said.
