Oracle Corp won unconditional European Union approval on Thursday for its $7 billion takeover of Sun Microsystems, a month after offering public pledges to sooth regulatory concerns.
The acquisition will reshape the high-tech landscape, with Oracle, the world's No. 2 business software maker, moving into the hardware business. Sun is the top player in the $17 billion high-end computer-server market.
Oracle promised in December to keep the market open for others to make storage engine software for Sun's MySQL database and to boost investment in the unit after the European Commission launched an in-depth investigation of the deal.
It also pledged to set up a separate customer advisory board of MySQL users.
Those concessions have satisfied Europe's competition watchdog that the deal will not distort the market.
I am now satisfied that competition and innovation will be preserved on all the markets concerned, EU Competition Commissioner Neelie Kroes said in a statement.
Oracle's acquisition of Sun has the potential to revitalise important assets and create new and innovative products.
The Commission said its decision took into account Oracle's public pledges and that the company had already implemented some of its promises.
It said there was a competitive alternative to MySQL. But the decision did not satisfy some opponents.
Florian Mueller, a spokesman for the founder of MySQL, Michael Widenius, who is strongly opposed to the deal, said the European Union executive's decision was wrong.
It's not based on hard facts... It should not serve as the basis for decisions taken by other regulators because it would set an awful precedent for merger control in connection with open source and a variety of other IT business models, he said.
While it was not unusual for the Commission to clear merger cases after in-depth probes, dissatisfied third parties could challenge the Oracle decision in court due to the absence of formal concessions from the company, said antitrust lawyer Paul McGeown at Hunton & Williams.
Vocal complainants during the process are potential litigants. We won't know for some time but this is not the end of the story, he said.
The Commission's decision could be partly due to its desire to avert a split with the U.S. Department of Justice, which approved the deal in August, said Alec Burnside, a partner at global law practice Linklaters.
Oracle refused to formalise its pledges and the Commission doesn't seem to have been willing to follow through with its concerns by imposing a prohibition, perhaps because of the transatlantic tensions around the case, he said.
Authorities in China and Russia have yet to approve the deal.
The Sun takeover will give Oracle control of Sun's server computers and storage equipment, its widely used Java programing language, the Solaris operating system and SQL database.
Sun competes with IBM, Microsoft and Hewlett-Parkard Co in the computer server market.
(Editing by Dale Hudson and David Cowell)