Brussels approves $7.4bn Oracle-Sun deal

Europe’s leading antitrust watchdog on Thursday gave its unconditional approval to the planned $7.4bn purchase of Sun Microsystems by Oracle.

It had delayed the deal for months over concerns about the possible impact on MySQL, Sun’s open-source database business.

Neelie Kroes, European Union competition commissioner, said: “I am now satisfied that competition and innovation will be preserved on all the markets concerned.”

European competition officials had expressed concerns that if Oracle took control of MySQL unconditionally, it could have an incentive to suppress or restructure a product that is given away for free and that could pose a disruptive threat to its own business.

The European stance was always at odds with that of US counterparts and this at one stage last year threatened to create a transatlantic rift between the regulatory agencies.

The transaction was approved last summer by antitrust officials in the US, where both companies are based. US officials raised no significant issues over the database business – and in November, when the competition officials in Europe persisted with their concerns, presenting Oracle with a formal statement of objections, the US Department of Justice issued a public statement to emphasis its different stance.

It was a month later, and after a two-day private hearing with Oracle and other interested parties in Brussels, that European officials signalled a change in their position.

They welcomed Oracle’s 10-point list of “public commitments”, though these had no legal force, and Ms Kroes said she was “optimistic” the case would have a satisfactory outcome. At that point, investors and market traders assumed that clearance was likely.

In its statementon Thursday, the commission said that those pledges – and signs that Oracle had already begun implementing them – had been factors in its decision to clear the deal with no conditions.

But officials said their in-depth investigation had shown that while MySQL and Oracle competed in certain parts of the database market, they were not close competitors in others, such as the high-end segment.

“Many database users” considered another open-source database – PostgreSQL – was a “credible alternative” to MySQL, and that so-called “forks”, utilising the MySQL code base, might also develop. These could all act as a competitive constraint on Oracle.

In Europe, vocal opposition to the deal and concerns about the impact on MySQL had been raised by third parties including Microsoft, SAP and MySQL’s founder, Monty Widenius. Microsoft is one of the other main operators in the database market. IBM, the third principal proprietary database vendor, did not raise issues.

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