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Purchase of Sun would be big tech win for IBM

The companies are reportedly in talks over a deal that would total at least $6.5 billion and shake up Silicon Valley.

March 19, 2009|ASSOCIATED PRESS

SAN FRANCISCO — If IBM Corp. scoops up Sun Microsystems Inc. for at least $6.5 billion in cash, as the companies are discussing, IBM would be making an opportunistic grab for a deep well of technology that Sun has nearly buried itself developing.

The proposed acquisition would be the biggest yet for IBM, of Armonk, N.Y. It would shake up Silicon Valley and the corporate computing world, marrying two traditional foes whose animosity was squashed relatively recently.

A person familiar with the negotiations confirmed the talks Wednesday to the Associated Press. This person spoke on condition of anonymity because the discussions were continuing and might not lead to a deal. The talks were reported earlier by the Wall Street Journal.

The news sent Sun shares soaring $3.92, or 79%, to $8.89. IBM fell 96 cents, or 1%, to $91.95.

As of the end of 2008, Sun, of Santa Clara, Calif., owned 10.1% of the worldwide server market, while IBM held nearly 32%.

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