SAN FRANCISCO — Oracle Corp. snapped up computer server and software maker Sun Microsystems Inc. for $7.4 billion Monday, trumping rival IBM Corp.'s attempt to buy one of Silicon Valley's best-known — and most-troubled — companies.
The deal would end Sun's 27-year history as Silicon Valley's brash independent and shake up the computing industry. It comes after a monthlong drama that entered its final chapter last week.
IBM had retracted an earlier buyout offer for Sun after the two sides couldn't agree on key details.
Once Oracle entered the fray, Sun tried to turn up the heat on IBM, which resubmitted its previous offer, only to be outdone by Oracle's latest power play. Now Oracle, traditionally a business software maker, will be the company that tries to use Sun's assets to build a more comprehensive one-stop technology shop.
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"With the acquisition of Sun, Oracle is now able to make all of the pieces of the technology stack fit together and work well," Oracle Chief Executive Larry Ellison said during a Monday conference call.
The deal would give Oracle ownership of the Java programming language, which runs on more than 1 billion devices around the world. Oracle also would take charge of the Solaris operating system, which already has been a platform for many of Oracle's products.
Oracle will pay $9.50 in cash for each Sun share. The price represents a 42 percent premium to Sun's closing stock price of $6.69 on Friday, and is about twice what Sun was trading for in March, before word leaked that IBM and Sun were in buyout negotiations. Net of Sun's cash and debt, the transaction is valued at $5.6 billion, Oracle said.
IBM had offered to buy Sun for $9.40 per share, but acquisition talks fell apart this month in a disagreement over price and the extent to which IBM was willing to see the deal through an antitrust review.