Oracle could soon announce its largest acquisition ever

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on Dec 17, 2021
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  • Oracle is in talks to buy Cerner Corporation for about $30 billion.
  • The acquisition will help Oracle expand its footprint in the health space.
  • Shares of Cerner are up nearly 15% this morning on the WSJ report.

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Shares of Cerner Corporation (NASDAQ: CERN) are up nearly 15% on Friday after the Wall Street Journal said Oracle Corporation (NYSE: ORCL) was in talks to buy the health information technology company for $30 billion.

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Oracle will get to expand in the healthcare space

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If the software giant proceeds with the deal, it will be the most it has ever spent on an acquisition. Oracle is fairly active in the healthcare space, and bringing Cerner under its umbrella offers an opportunity to expand its footprint further in this industry.

Neither of the two companies, however, have yet confirmed the WSJ report. Including the price action this morning, Cerner still has a market cap of just over $26 billion. Earlier this year, Cerner hired the former vice president of Google Health, David Feinberg, as its chief executive officer.

The news comes only a day after Oracle signed a multi-year cloud-computing agreement with Xerox.

Why else would Oracle want to buy Cerner?

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Buying Cerner will also help Oracle win more business from the cloud space, in which it has been slower than the likes of Microsoft and Amazon, both of whom have topped $1.0 trillion in market cap, partially thanks to their rapidly growing cloud business.

In April 2021, Microsoft bought Nuance Communication – a Burlington-based artificial intelligence company, for $19.7 billion.

Oracle has been committed to shareholders returns and announced a new $10 billion share repurchase programme last week, on top of 32 cents in quarterly cash dividend. Its stockholders, however, are not very excited about the prospect of a deal with Cerner. Shares of the world’s 2nd largest software company are down 5.0% on Friday.

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