IBM is in talks to buy Sun Microsystems in a cash deal worth at least $6.5 billion that would tighten its grip on the server market, according to the Wall Street Journal.
Citing people familiar with the matter, the WSJ says the two IT giants are in talks over a possible deal that would boost IBM's presence in software, finance and telecommunications markets, as well as on the Internet.
The WSJ says that, although talks could yet fall apart, the deal could go through as early as this week with IBM paying a premium of over 100% on Sun's closing price of $4.97 a share on the Nasdaq on Tuesday.
Sun, which has struggled in recent years, has approached several potential buyers over the last few months, including the worlds biggest technology company Hewlett-Packard (HP), says the WSJ.
If the IBM deal goes ahead, it would boost Big Blue in its battle with HP in the computer server market. Citing research firm IDC, the paper says IBM had 31.4% of the market last year, HP was second with 29.5% and Sun fourth at 10.6%. Many of Sun's customers are to be found in the high-end capital markets transaction processing space.
The deal would also give IBM a greater say in the development of the Java programming language, and the popular MySQL database management toolkit.
IBM in Talks to Buy Sun in Bid to Add Web Heft - WSJ