US computer maker Sun Microsystems Inc won permission on Friday from the European Commission to purchase Colorado-based Storage Technology Corp for $4.1 billion in cash.
The biggest-ever acquisition by Sun is expected to add about $2 billion to Sun's annual revenue of about $11 billion. It also would allow Sun to better offer one-stop customer shopping for its products and services and could bolster its server business.
"The Commission's investigation showed that the horizontal overlaps between the activities of Sun and StorageTek are limited and that the combined entity would continue to face several strong competitors with significant market shares," the European Union executive Commission said.
"Moreover, since Sun is largely a re-seller of StorageTek's products, the transaction would have no significant effect in the areas of overlaps," it added.
The Commission, the EU's antitrust body, also examined the possible impact of the deal on enterprise storage solutions and did not find any negative impact on the European market.
"The Commission ultimately took the view that the proposed transaction would not materially affect the choice of purchasers, regardless of the IT environment in which they operate their storage solutions," it said.
Santa Clara-based Sun was harder hit than its competitors in the wake of the dot-com bust in 2000 as two key customer segments - telecommunications and financial services - proved more vulnerable than other industries.
Sun has lost ground in its main business of servers, the large powerful computers used by businesses. Servers using cheaper, industry-standard chips and the Windows or Linux operating systems have surged in popularity.
Sun has lost market share to International Business Machines Corp and Dell Inc in the server market.
Louisville, Colorado-based StorageTek would be folded into Sun's storage business. The acquisition would add about 1,000 salespeople to Sun's work force.
StorageTek, which employs about 7,000 people, has a long history of providing so-called secondary storage, such as data archiving and back-up systems, which would dovetail with Sun's primary data storage equipment systems, which typically store databases and the like.