Updated from 10:37 a.m. EDT
rumored acquisition of
may happen as early as next week, according to reports, potentially creating a hardware and software behemoth that would transform the tech landscape.Tech giant IBM may soon reveal details of its largest-ever takeover, says
, citing sources familiar with the deal, but warned that the price is still not final.
Although the acquisition is seen as
, price has apparently been a sticking point in the negotiations between the two firms.
Earlier discussions reportedly centered on a $6.5 billion price tag, although IBM is said to have
the value of the deal down. Both
The New York Times
The Wall Street Journal
said Thursday that IBM will probably pay between $9 and $10 per share for Sun, down from a price of about $10 to $11 per share.
There is already speculation about how a Sun/IBM merger could alter the tech sector, effectively leaving just a handful of firms jostling for a share of enterprise server spending. With
in data centers, a combined Sun and IBM would face off against
in the x86 server space and potentially
, which recently launched its
All this market consolidation could create a headache for users, who would no longer be able to play Sun off against IBM, and the acquisition is likely to come under the antitrust microscope.
Other tech firms are also circling, ready to swoop down on any disgruntled Sun customers. Dell CEO Michael Dell, for example, plans to
surrounding the Sun/IBM deal. Sun accounts are very concerned about what will happen to the Solaris platform and Sparc microprocessor, he said recently.
The acquisition clearly raises plenty of questions, not least of which is the impact on IBM itself. In addition to the
in the firms' product lines, IBM would also inherit Sun's problems.
The Santa Clara, Calif.-based firm has earned a reputation for under-performing and has been dogged with execution issues and losses in the last few years, in sharp contrast with IBM. Despite the challenges, though, the deal is seen as highly opportunistic for IBM.
By gaining access to Sun's
customers, IBM could boost its presence in the lucrative oil and gas, telecom and government sectors. The Armonk, N.Y.-based firm would also inherit the MySQL database technology that Sun bought for a billion dollars last year, and may use Sun to beef up its
IBM shares were recently up 1.4% to $102.25, and Sun shares were up 2.7% to $8.43.