September 3rd, 2009
What the EU delay means for Oracle, Sun and us
The EU’s decision to delay the Oracle-Sun merger is an important marker in the history of technology and business.
As a practical matter its importance is limited. The merger will eventually be approved.
Once a merger agreement is announced the company to be acquired always starts losing its independence, as some managers start maneuvering for positions in the new company while others pursue exit strategies. Were Oracle to walk away now Sun would not be viable. Another merger partner would be needed.
The importance of the move lies more in the realm of policy. European regulators are stopping, at least for a time, an American transaction that American regulators have no trouble with.
Back in the era of big navies this was called “a shot across the bow.”
Oracle’s initial statement on the matter is cool, but I do not want to be the person serving Larry Ellison his coffee this morning. A bunch of foreigners are delaying implementation of his plans, lowering the chance of success for this merger, interfering with American business.
The EU has grounds, of course. There are thousands of Oracle and Sun employees in Europe. That is why the reaction from Redwood Shores, so far, is restrained.
But if the case drags on this could easily escalate, with American businesses demanding freedom from European interference and Europeans sniffing about monopoly power.
Eventually, those charges and those feelings are going to come out. Maybe not on this deal, but at some point some American company is going to lose patience and start raising a political stink.
What happens then is anyone’s guess. Do you have one?
Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 09/03/09
