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IBM In Talks to Buy Sun

Armonk, N.Y.-based IBM is in talks to buy Sun Microsystems (Santa Clara, Calif.) gain a greater share of the computer-server market, according to a report from Bloomberg.

The purchase would give IBM access to customers that are attached to the Sun brand, according to a person familiar with the situation who declined to be identified because the talks are private. IBM may pay at least $6.5 billion, the Wall Street Journal said, valuing Sun at almost twice its $4.97 closing price yesterday.

According to Bloomberg, IBM CEO Sam Palmisano said last week he planned to "go on offense" during the recession, pursuing acquisitions and investing in research. A purchase would give Palmisano a greater share of a shrinking market. Last quarter, server sales declined 14 percent, the largest drop since the aftermath of the dot-com bust, noted the report.

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