19 Mar I.B.M., looking to buy Sun, sets up a software strategy
I.B.M.’s interest in acquiring the server computer maker Sun Microsystems for nearly $7 billion may seem at first to be a reversal of its recent efforts to move away from the hardware business.
But analysts say there is more to Sun than servers, which are used in corporate data centers. They say its strengths in software, systems design and research make it an attractive target.
The price tag being discussed by the companies works out to nearly $10 a share, a person with knowledge of the negotiations said on Wednesday. That is approximately twice Sun’s closing price on Tuesday. Shares of Sun surged nearly 79 percent Wednesday on news of the negotiations, to close at $8.89.
I.B.M. has pared back its dependence on hardware, where profit gains have declined, while increasing its investment in higher-margin software and services businesses. It sold off its personal computer business to Lenovo of China in 2005, and its hard-disk drive unit to Hitachi of Japan in 2003.
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