IBM-Sun deal fails over payments and terms

Talks by IBM to acquire rival Sun Microsystems have fallen apart, in part due to Sun rejecting an offer from IBM as being too low, among a rejection of other conditions attached to the deal.  IBM, advised by the law firm Cravath, Swaine & Moore LLP, has retracted its offer yesterday, which puts paid to IBM efforts to become the second-largest player in the market.  Shares of Sun fell more than 23 percent on Monday even before the offer was withdrawn.

Earlier reports from The New York Times reported that some 100 lawyers from IBM have been poring over Sun's patents and licensing agreements in a hotel in Silicon Valley. Indeed, Judi Hasson covered this story in a FierceCIO just last month.  The dust is just settling, though Enterprise Strategy Group analyst Brian Babineau says it was "pure insanity" for Sun to turn down the offer.  Sun was not immediately available for comment while IBM declined to comment.

For more on this story:
- check out this article at Network World
- check out this article at the Wall Street Journal
- check out this article at the New York Times

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