IBM in talks with Sun

Article Excerpt

IBM $97.61 (New York symbol IBM; Shares outstanding: 1.3 billion; Market cap: $131 billion; SI Rating: Above Average) is in talks to buy computer-hardware maker Sun Microsystems (Nasdaq symbol JAVA) for a rumoured $6.5 billion. Sun would be a good fit with IBM. Both IBM and Sun make computer servers for governments and big corporations, so IBM would cut its costs and increase its market share by purchasing Sun. (IBM has about 30% of the server market; Sun would push this up to 40%. IBM’s revenue is about eight times Sun’s sales.) The move would also help IBM compete with Cisco Systems, which plans to enter the server business. In addition, Sun’s software expertise and its widely used Java programming language would enhance IBM’s web-based services. Regardless of the outcome, IBM is still a safety-conscious buy. buy…

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