(SBU) Oracle stated that the Commission is pressuring it to divest MySQL as a condition for approval of the merger. A Statement of Objections is a normal step in many of these cases, which often results in intensified negotiations. Commission phase II proceedings historically result in merger prohibitions only about 10 percent of the time, but around half of cases are cleared subject to conditions such as divestitures. The Commission has until January 19 to issue a final decision approving or blocking the merger. If a Statement of Objections (SO) is issued, Oracle and Sun will then have the right to an oral hearing to defend the merger. (SBU) Oracle said that the DG COMP case team told the company to expect a formal “Statement of Objections” (formal charge of violation of EU competition law) soon. DOJ investigated this aspect of the transaction during its own review and concluded otherwise. The Commission is concerned that Oracle will hamper development of MySQL, an open-source database that competes with Oracle and with products of several other firms, such as Microsoft and IBM.

The Commission opened a second phase investigation of the merger in September. (SBU) The Oracle-Sun merger, announced last spring, was approved by the U.S. to push for rapid European Commission approval of the merger. (SBU) Oracle President Safra Catz met the week of October 20 with European Union Competition Commissioner Neelie Kroes to discuss the company’s concerns over the Commission’s review of the proposed $7.4 billion Oracle – Sun merger. END SUMMARY.ĮUROPEAN COMMISSION’S ORACLE-SUN MERGER REVIEW - – Sun announced October 20 that it is cutting 3000 jobs over the next year, as a result of delays in receiving merger clearance from the Commission. Oracle says it is unwilling or unable to make certain divestitures to satisfy the Commission’s concerns, and that merger failure will cause Sun to go bankrupt. A Statement of Objections is a normal part of a Commission merger review, and the Commission has until January 19 to approve or prohibit the merger.

Oracle expects the Commission to issue a Statement of Objections shortly. USDOJ is coordinating closely with the Commission to try to prevent a divergent outcome in this matter. The merger, approved by USDOJ in August, is under review by the Commission. Oracle visited USEU October 21 over concerns that its $7.4 billion plan to acquire Sun Microsystems is at risk of being blocked by the European Commission. UNCLAS SECTION 01 OF 02 BRUSSELS 001455 SENSITIVE SIPDIS NOT FOR INTERNET DISTRIBUTION DOJ FOR CALDWELL HARROP STATE PASS TO FTC FOR JOHN PARISI DOC FOR DAVID DEFALCO STATE FOR EUR/ERA, EEB/TPP/MTA, EEB/OIA PLEASE PASS TO USTR – DAVID WEINER Oracle Concerned Over Eu Investigation Of Sun Merger

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