Sun, Oracle seen unlikely to face antitrust strife

By Diane Bartz

WASHINGTON, April 20 (Reuters) - Oracle Corp (ORCL.O) is unlikely to face serious antitrust objections as it moves to enter the computer hardware market by buying Sun Microsystems Inc (JAVA.O) for more than $7 billion, antitrust experts said.

They did not anticipate that federal regulators would be troubled by the deal since Oracle primarily focuses on database and business oriented software and Sun sells mainly high-end servers.

"Far from competing, the products of Sun are largely complementary with Oracle's products. Indeed, Oracle software is frequently installed on Sun servers," said Beau Buffier, an antitrust lawyer with law firm Shearman and Sterling LLP.

"Of course, Sun has some important software, such as Java and its Solaris operating system, but in these key areas there really is no meaningful competition with Oracle," Buffier said.

Oracle's database and related software already work closely with Sun's Java software and Solaris operating system.

International Business Machines (IBM.N) may have abandoned its bid to buy Sun partially because of perceived antitrust concerns, according to a research note from Stifel Nicolaus.

Sun previously rejected IBM's offer to pay up to $9.40 a share, according to sources with knowledge of the matter. Oracle will pay $9.50 a share for Sun.

"We believe an Oracle-Sun deal faces significantly fewer obstacles in the antitrust review than an IBM-Sun deal would have, particularly as it does not raise the issues regarding consolidation in the server and storage markets that would have been problematic for a deal with IBM," the research note said.