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SANTA CLARA, CA-Oracle Corp. said Monday it has signed a definitive agreement to acquire Sun Microsystems for $9.50 per common share. The $7.4 billion deal–$5.6 billion after accounting for Sun’s cash and debt–brings together a corporate software maker and a builder of corporate computer systems whose headquarters are 24 miles apart, Sun’s here in Santa Clara and Oracle’s just up the Peninsula in Redwood Shores.

The deal is expected to close this summer subject to Sun stockholder approval, regulatory approvals and customary closing conditions. Earlier this month Sun reportedly rejected a $7-billion ($9.40-per-share) offer from International Business Machines, which like Sun builds corporate computer systems.

The acquisition joins Oracle’s enterprise software with Sun’s Solaris operating system and Java programming language. “Our customers benefit as their systems integration costs go down while system performance, reliability and security go up,” Oracle chief executive Larry Ellison said in a prepared statement. “Joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace,” echoed Sun CEO Jonathan Schwartz.

Oracle says it expects Sun to contribute $1.5 billion to its operating profit in 2009, increasing to $2 billion in 2010. The acquisition is expected to add $0.15 per share to its adjusted earnings in the first full year after closing the deal. Shares of Oracle were trading at $18.56 in late morning trading, off $0.50 (2.6%) on the day. Shares of Sun were trading at $9.12, up $2.42 (36.1%) on the day. Shares of IBM stood at $99.29, down $2.02 (1.9%) on the day.

Over the last four fiscal years, Oracle has invested billions of dollars, including $9.4 billion in fiscal 2008, to acquire a number of complementary companies, products, services and technologies. These include BEA Systems Inc. [2008], Hyperion Solutions Corp. [2007], Siebel Systems Inc. [2006] and PeopleSoft Inc. [2005].

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