IBM walks away from Sun
Company withdraws acquisition bid after disagreements related to share price and terms arise
IBM has withdrawn its offer to buy Sun Microsystems in a deal valued at about $7 billion.
The Wall Street Journal first made details of the merger public last month with reports claiming the two companies have been in buyout talks for more than three months and reached a critical final stage over the last few days.
The Journal is now claiming that IBM has withdrawn its bid after disagreements about price and other terms came up.
While details of the offer remained undisclosed, some placed it at $9.50 a share, with the acquisition potentially valued at $7 billion. Price was a strong factor with Sun’s board reportedly split in their opinion of IBM’s offer - CEO Jonathan Schwartz favoured the deal, while chairman Scott McNealy didn’t.
Sources claim the company was pushing IBM to commit to the deal even if it ran into objections from government antitrust authorities because of overlapping product lines.
Sun also terminated IBM’s status as its exclusive negotiating partner, which led to IBM choosing to walk away from the potentially historic deal.
It’s not clear at this point whether all ties are severed or if merger talks would resume if the companies revised its expectations.