Oracle plans aggressive fight with EU over Sun takeover
IDG News Service - Oracle is planning an aggressive fight with European regulators if its attempt to take over Sun Microsystems is slapped with a statement of objections in the coming week, said people close to the company Wednesday.
Unsourced news reports that a statement of objections is imminent surfaced earlier Wednesday. The European Commission declined to comment on the reports, but confirmed that if such a step were to be taken it would have to be done soon to allow enough time for procedures leading up to the Jan. 19 ruling deadline.
"The ball game would change dramatically if the Commission issues a statement of objections," said one person familiar with Oracle's thinking who insisted on anonymity.
He added: "Oracle has been holding back until now, and contrary to what the Commission says it has addressed the substance of the Commission's concerns about the deal in huge abundance."
When the Commission opened an in-depth probe of the Oracle-Sun deal at the beginning of September, it said it was concerned about the deal's impact on the market for software that runs corporate databases.
Sun owns MySQL, an open-source challenger to the big three makers of proprietary database technology: IBM, Microsoft and the market leader, Oracle.
Oracle is unwilling to sell off MySQL because it is "a strategic imperative of the deal," the person said. Oracle needs MySQL in order to compete with Microsoft in markets such as the one for small and medium-size corporate clients, he said.
"This deal is the most transformational deal in the history of the IT industry. It will enhance competition, not erode it, by creating a more viable counterweight to Microsoft," another person close to the merging companies said, also on condition that she wasn't named.
The frustration with European competition regulators is palpable, she said. The European Commission was notified of the deal at the beginning of August -- a time when many Commission officials are away on holiday.
The chances of getting a quick thumbs-up in Brussels were not strengthened by the timing, as less-experienced officials were left to handle the notification, she said.
"It's not ideal to have your deal handled by the B-team at the start. It can send a review off in the wrong direction. It looks like that's what has happened with Oracle/Sun," this person said.
If the Commission does issue formal objections to the deal it will mean war, said the person familiar with Oracle's thinking. In reference to the most controversial merger ruling by the Commission in recent years, he said the transatlantic political storm that would be unleashed if the Commission blocked Oracle/Sun "would be like GE/Honeywell on steroids."
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