On Thursday morning, European Union regulators announced the launch of an antitrust probe into U.S. software maker Oracle's (NASDAQ: ORCL) takeover of Sun Microsystems. The regulatory group believes that the deal could lead to higher prices and limited choice for database software. Approval from this group is considered the main stumbling block for the deal, which has cleared the Department of Justice in the United States.
The final decision has a deadline of 90 days, or January 19, 2009. By this date, the European Commission can decide to clear or to block the deal. More often than not, the Commission will force companies to make changes that would eliminate any concerns over antitrust regulations.
Technically, ORCL is an outstanding performer -- but it is on pace to battle overhead resistance in the $23 region. In March, the stock performed an about-face and started its trek higher along the support of its 10-week moving average. This trendline has acted as support through many tests, and it appears that it will fill this role yet again.
On the rare occasions that the 10-week trendline has failed, the 20-week trendline has stepped in and provided support. I wouldn't expect this announcement to have much impact on the stock, we could see a shake up once the European regulatory body issues a decision; but that could be as many as 90 days away.
Struggling Playboy outsources business ops
J. Crew earnings preview: A strong Q3 all buttoned up?
Twitter to make acquisitions, generate revenue in 2010
Reader Comments (Page 1 of 1)
9-03-2009 @ 9:11AM
Steve said...
These are two U.S. companies which even if they DO merge, will have plenty of competition from OTHER U.S. companies that the Europeans are hastling!! I side with the Europeans on most issues, but I have to say they need to keep their big nose out of U.S. business ESPECIALY when the economy is attempting to recover!
9-03-2009 @ 9:38AM
scottb411 said...
IBM, SAP, Microsoft
-> Plenty of competition for Oracle on all fronts
As for the MySQL database, it is open source and will fork if Oracle messes up. PostgreSQL is an alternative to MySQL for open source. Approve the deal, move on.
9-03-2009 @ 10:16AM
Brad said...
So why do two American companies care what the EU says? If the EU doesn't like it, too bad but they should have no say so what so ever on how American companies operate. I would say that Oracle and Sun should maybe stop doing business over there. To hell with the EU.
9-03-2009 @ 10:46AM
Ernest said...
I hope the deal implodes. Big Business means high cost to consumer. A few examples: Comcast, Best Buy, GM, Insures and AIG to big to fail. More profits for CEO and more jobs shipped over seas.
9-03-2009 @ 10:57AM
jaguarman4 said...
Im glad to see America is finally waking up ! we need to continue to let all of Washington know we are watching and we will vote them out ! Washington must remember as they continue to point fingers at business 10 fingers are pointing back at the corruption in D C ask yourself this 1 question HAS A POOR PERSON EVER GIVIN YOU A J O B ?? Obama is pushing class warfare as JESUS SAID a man who doesnt want to work shouldnt eat!!!!!!