Oracle (ORCL) announced the acquisition of NetSuite for USD 9.3 billion. NetSuite is a cloud service provider who entered the market early on.
Larry Ellison, CEO of Oracle, is also a major investor in NetSuite, an early cloud-computing company. Larry Ellison owns 27% of Oracle’s common shares worth about USD 47.6 billion. Ellison and his family directly or indirectly also own about 40% of NetSuite. That share is worth about USD 3.5 billion at acquisition price. To address the conflict of interest, only independent directors of NetSuite negotiated the deal. Also, a majority of the non-Ellison shareholders in NetSuite have to approve the deal. This means there is still a potential of legal action, even if it’s just tire kicking.
For Oracle, this is one element helping them to catch up to others in the market like Salesforce (CRM), Amazon (AMZN) and Microsoft (MSFT). At the beginning of the cloud phenomenon, Larry Ellison dismissed cloud computing as marketing “gibberish”. Now, as late starters they have to buy their way into the market.
Larry Ellison, CEO of Oracle, is also a major investor in NetSuite, an early cloud-computing company. Larry Ellison owns 27% of Oracle’s common shares worth about USD 47.6 billion. Ellison and his family directly or indirectly also own about 40% of NetSuite. That share is worth about USD 3.5 billion at acquisition price. To address the conflict of interest, only independent directors of NetSuite negotiated the deal. Also, a majority of the non-Ellison shareholders in NetSuite have to approve the deal. This means there is still a potential of legal action, even if it’s just tire kicking.
For Oracle, this is one element helping them to catch up to others in the market like Salesforce (CRM), Amazon (AMZN) and Microsoft (MSFT). At the beginning of the cloud phenomenon, Larry Ellison dismissed cloud computing as marketing “gibberish”. Now, as late starters they have to buy their way into the market.
Disclosures
- We have a position in Microsoft.
- We have no position in any of the other companies mentioned in this post.
- We have no plans to change our positions in the next 48 hours.
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