Sun bets big on open source future

SANTA CLARA, USA: The acquisition of MySQL AB was expected to strengthen Sun Microsystems' position in enterprise IT to include the $15 billion database market.

Sun on Wednesday announced that it had entered into a definitive agreement to acquire open source database developer MySQL AB for $1 billion.

"Supporting our overall growth plan, acquiring MySQL amplifies our investments in the technologies demanded by those driving extreme growth and efficiency, from Internet media titans to the world's largest traditional enterprises,” said Jonathan Schwartz, CEO and president, Sun Microsystems.

Following the completion of the transaction, MySQL would be integrated into Sun's Software, sales and services organizations.

Santa Clara, California-based Sun would pay approximately $800 million in cash in exchange for all MySQL stock and assume approximately $200 million in options.

MySQL's CEO Marten Mickos would join Sun's senior executive leadership team.  

In the interim, a joint team with representatives from both companies would develop integration plans that build upon the technical, product and cultural synergies and the best business and product development practices of both companies.

Schwartz said the announcement “boosts our investments into the communities at the heart of innovation on the Internet and of enterprises that rely on technology as a competitive weapon."

The transaction was likely to close in late Q3 or early Q4 of Sun's fiscal 2008, Schwartz added.

Sun expected to report earnings of between $230 million and $265 million, or 28 cents to 32 cents a share, for the second quarter ended Dec. 30. The company also estimated it would post revenue of $3.6 billion.