The Channel logo

News

By | Gavin Clarke 16th April 2009 18:18

Antitrust-shy IBM closed to fresh Sun talks

Good thing, gone

So much for playing hardball: IBM is apparently not interested in resuming talks to purchase Sun Microsystems, following their recent break down.

IBM is believed to be concerned about the level of scrutiny a potential acquisition of its smaller hardware and software rival might would draw from regulators.

CNBC has reported that IBM's contacts within the US Department of Justice and the European Union said an acquisition would spark an antitrust review lasting six to nine months.

It was earlier reported Sun was willing to consider a fresh offer from IBM, at a reduced price. That would be the second cut, after IBM reduced its initial bid from between $10 and $11 to $9.40 a share.

The first round of talks collapsed in April partly because Sun baulked at giving IBM too much control over its projects without getting guarantees the deal would be completed in the face of the inevitable regulatory scrutiny. Also, IBM was unwilling to agree to executive payouts.

IBM knows a thing or two about the cost and delays an antitrust regulation can bring to operations, and what it can do to a company's reputation and performance.

The company spent 13 years locked in a pointless investigation and long-running court battle with the DoJ, which had grown concerned in the 1960s about the company's domination of the market for general-purpose computers.

The DoJ's idea was to break IBM in to smaller companies that would compete with each other. The case was eventually thrown out in 1981, as the computing landscape changed.

The case, though, is believed to have altered IBM's behavior, with the company reluctant to price too competitively during the 1980s and 1990s in case it would again be accused of exploiting its position.

Even today, IBM is facing a regulatory probe over its mainframe business, this time at the hands of the EU's Competition Commission following a complaint by t3 Technologies. ®

comment icon Read 9 comments on this article alert Send corrections

Opinion

WWI French tank picture via Shutterstock
Vinod_Khosla

Chris Mellor

A VC with startup agenda slams established suppliers. Surprised? Neither were we
ZenPad_RealRacing
Boy writes a letter to Santa. Pic via Shutterstock

Kat Hall

Cornwall's win over BT should be a cautionary relationship tale

Features

Eclipse image via Shutterstock
The Azure Portal: Microsoft is betting on cloud for its future business
container_ship_hamburg_shutterstock_648
Michael Dell. Pic by Joi Ito
Cool Texas dude is just your average billionaire