Oracle (ORCL) to buy IT firm Cerner Corp (CERN) for US$28.3 billion

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Highlights:

  • Oracle Corp (NYSE: ORCL) has gained EU nod to acquire Cerner Corp (Nasdaq: CERN).
  • Oracle is likely to close the Cerner Corp deal at US$28.3 billion.
  • Oracle’s market cap is US$195.14 billion, while Cerner’s market value is US$27.92 billion.

US software giant Oracle Corp (NYSE: ORCL) has obtained unconditional EU antitrust clearance to acquire healthcare IT firm Cerner Corp (Nasdaq: CERN) for US$28.3 billion.

It was announced by the EU competition enforcer on Thursday.

The acquisition of Cerner Corp will be the biggest ever for business software maker Oracle.

The deal will open a floodgate of information and data to Oracle, which will enable it to draw more healthcare clients to its cloud environment.

The data from Cerner will allow Oracle to train and spruce up its AI-based cloud services.

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Oracle-Cerner merger poses no threat to rival companies: EU

The acquisition deal does not violate competition rules, and there shouldn’t be any fear or concerns regarding this, the European Commission said. The merged companies will not have the power to cull rival enterprises.  

Earlier, Cerner’s software ran in its clients’ data centers. It then started to shift its service to cloud computing providers like Amazon (AMZN) Web Services in 2019. 

However, things will change after the deal is completed. Oracle will transfer Cerner’s software to its cloud domain and improve the latter’s apps with tools such as voice assistant.

The transition can happen fast because Cerner’s largest business and the most critical clinical system is already running on the Oracle platform.

The deal is likely to be closed this year.

Oracle has a market cap of US$ 195.14 billion, while Cerner’s market valuation is US$27.92 billion.

Bottom line:

The deal will entail Cerner shareholders receiving US$95 in cash per share they hold. The cash for each share represented a premium of 5.8% to the company’s last closing price.



 


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