IBM may takeover Sun Microsystems

The technology world is abuzz with news that IBM plans to buy Sun Microsystems in a deal worth $6.5 billion.

Reputed daily Wall Street Journal broke the news earlier today, citing sources “familiar with the matter” but both IBM and Sun are remaining tight-lipped on the matter.

According to the report, Sun approached a number of technology companies, including Hewlett-Packard, with hopes of being acquired.

The hefty price tag of $6.5 billion translates to a premium of more than 100% over Sun's closing market price on Tuesday. If true, it will be the largest acquisition in IBM's history, surpassing the company’s buyout of business intelligence firm Cognos Inc. for nearly $5 billion in 2007.

Speculation is rife that IBM’s interest in buying Sun is in response to HP and Cisco expanding into the business of data centres.

IBM is already the world's largest server maker and the deal would further strengthen its pole position among competitors.

The report warns that, while the two companies are holding discussions, a transaction may not occur.

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