Long time technology giant IBM is in talks to buy out Sun Microsystems, Inc, another big player in the industry.
The offer IBM has out on the table is for at least $6.5 billion. If Sun decides to sell, it may be a good decision as the $6.5 billion offer amounts to about double of their market value. Should the deal go through, this would be the largest buyout in IBM history as IBM has been focusing more on software and business services rather than hardware.
It has been reported that executives for Sun Microsystems have actually been looking for someone to buy out the company, speaking with not only IBM, but also HP, Dell and Cisco. There is no question that IBM has the resources to go ahead with the buyout, as they had $13 billion in cash on the books at the beginning of this year.
There are basically five mainstream server giants: IBM, HP, Dell, Sun and Fujitsu. Should IBM and Sun merge, they would dominate just under 50 percent of the market.
Sun Microsystems has been in bad shape over the past few years. They recently announced a layoff of about 6,000 jobs which represents about 18 percent of their entire workforce. The value of Sun shares has also dropped 71 percent in the last year.