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AP Source: IBM in talks to buy Sun Microsystems

IBM Corp. is in talks to buy Sun Microsystems Inc. for at least $6.5 billion in cash, a deal that would shake up Silicon Valley and the corporate computing market, The Associated Press has learned.

A person familiar with the situation told the AP of the negotiations, confirming an earlier report Wednesday in The Wall Street Journal. This person spoke on condition of anonymity because the talks are ongoing.

The Journal cited unnamed people familiar with the matter and said the deal could occur as early as this week.

The report sent Sun shares soaring $3.05, up 61 percent, to $8.02 in morning trading. IBM shares were down $2.46, or 2.7 percent, to $90.45.

Armonk, N.Y.-based IBM and Santa Clara, Calif.-based Sun both make computer systems for corporate customers. A purchase of Sun could help IBM in the finance and telecommunications markets as it tries to expand its role in digitizing key pieces of infrastructure, from electric utilities to water supplies.

While some of their technologies and customers overlap, IBM and Sun have been heading in different directions for most of the past decade.

Sun, a darling of the dot-com era, has been struggling since the tech bust of 2001 to find its place. The company has cut thousands of jobs and tried to refocus on open-source software besides the proprietary systems it built much of its wealth on.

IBM, after an enormous restructuring in the 1990s, has proven one of the technology industry’s most reliable earners. It has gobbled up dozens of companies in recent years. But a $6.5 billion deal would be its biggest to date.

It would represent a big premium for Sun, which closed trading Tuesday with a market capitalization of less than $4 billion. However, Sun’s last quarterly report shows it with more than $2.6 billion in cash and securities that could be readily converted to cash.

Citizen Online Archive, 2006-2009

This archive contains all the stories that appeared on the Tucson Citizen's website from mid-2006 to June 1, 2009.

In 2010, a power surge fried a server that contained all of videos linked to dozens of stories in this archive. Also, a server that contained all of the databases for dozens of stories was accidentally erased, so all of those links are broken as well. However, all of the text and photos that accompanied some stories have been preserved.

For all of the stories that were archived by the Tucson Citizen newspaper's library in a digital archive between 1993 and 2009, go to Morgue Part 2

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