Questions around the IBM-Sun acquisition

The Wall Street Journal is reporting that the IBM-Sun Microsystems merger deal may have hit some snags, due to delays completing due diligence and questions about the organization of the combined company.

But the report said delays like this are common in large mergers, and it questioned the significance of the deal. It suggested that HP and Dell, IBM and Sun's competitors in the server business, are the only companies likely to be drastically affected by the merger going through or not.

While the report also mentions that government buyers of Sun products could be affected by the outcome of the talks, many telecom companies are partners with one or both of these companies, and also could be affected. A merger could impact service and alter price points, as well as affect the actions of another major competitor the article fails to mention: Cisco.

The IBM-Sun deal would be worth roughly $6.5 billion, much smaller than other large mergers in the space, such as HP's purchases of EDS and Compaq for $13.9 billion and $25 billion respectively. But it would be notable simply because of the lack of other major merger and acquisition moves in and around the technology sector lately, due to the flagging economy.

For more: - see the Deal Journal article here

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