Oracle bought Sun for $7.4B at the bottom of the downturn and kept Java and Solaris

By April 2009 Sun Microsystems, the dotcom-era pioneer once valued at over $200 billion, had lost money in three of four quarters as the recession crushed server orders. Its talks with IBM — which had offered $10–11 a share — had just broken down, leaving the company's future uncertain.

Oracle stepped in and agreed to buy Sun for $9.50 a share in cash, about $7.4 billion, or $5.6 billion net of Sun's cash and debt. Larry Ellison said Oracle would be the only company able to engineer an integrated system 'from database to disk'; Sun's chairman called it a moment that redefines the industry.

Oracle said the deal would be accretive by at least $0.15 per share in the first full year, with the acquired business contributing over $1.5 billion to non-GAAP operating profit, because Java and Solaris were already core to its database and middleware. The deal closed on January 27, 2010, after EU approval, with Ellison saying, 'We're hiring, not firing.'

For $7.4 billion ($5.6 billion net of Sun's cash), Oracle got Java, Solaris and hardware, projecting $1.5 billion of first-year operating profit.

Sun's Java was the most important software Oracle had ever acquired — core to its middleware.

Solaris was the leading platform for Oracle's largest business, the database.

Owning hardware let Oracle engineer an integrated stack competitors had to assemble.

The recession price — $5.6 billion net of cash — made the strategic asset cheap.

The best time to buy a technology you depend on is when the seller is bleeding; crisis prices favor buyers with cash, an installed base and integration skills.

Oracle completed the acquisition in January 2010 after European regulators approved it, and Ellison pledged to invest rather than shrink Sun. The deal ended Sun's 27 years of independence and gave Oracle control of Java, Solaris, SPARC and MySQL, reshaping the enterprise stack around its own integrated systems.