EU officially objects to Oracle’s Sun takeover

(By Philip Carnelley, 10 Nov 09, 09:00) After a mere six months of consideration (four months to decide it wanted to consider the proposal, plus two months to consider) the EU has finally decided it wants to object to Oracle’s proposed takeover of Sun Microsystems. Oracle must be absolutely livid. As we have reported before, while the deal is delayed, Sun’s business continues to spiral down. As Bloomberg points out, a statement of objections doesn’t automatically mean the EU will block the deal – TomTom was allowed to buy TeleAtlas, despite EU objections. But the pressure is certainly on Oracle to offer concessions.

At this stage Oracle seems to be more concerned with winning the argument, issuing a spirited defence saying that its move would revitalise competition in the server market as well as not affecting the database market materially. While the EU’s statement of objection has not been made public, Oracle’s response certainly has. It pulls no punches, saying that the European Commission has “a profound misunderstanding of both database competition and open source dynamics.’ Interestingly, the FT points out that the US DoJ issued its own statement yesterday reiterating its view that the proposed deal does not give rise to anti-trust concerns. Many other independent commentators have sprung to Oracle’s defence, and indeed, were we to be asked, we would too. Whether Oracle should buy Sun at all we’re less sure, but we believe it should be allowed to do so. It’s also worth saying that if Oracle does walk away from the whole deal, Sun’s future looks pretty bleak to us. It surely has no chance of remaining an independent entity.