International Business Machines Corporation (IBM) is in negotiations to purchase Sun Microsystems Incorporated, sources told Reuters on Wednesday, in a deal that could help the technology giant compete against rivals in the high-end computer server market. IBM is offering to pay at least $6.5 billion, or double Sun's closing price on Tuesday of $4.97, the Wall Street Journal reported earlier on Wednesday. If the technology companies reach agreement, it would be IBM's biggest acquisition and would be a departure from its recent strategy of focusing on deals to strengthen its software and services businesses. Analysts said the talks were part of a consolidation trend, as Hewlett-Packard, IBM, and Cisco Systems compete for control of corporate data centers and seek to supply the high-end computers that power complex corporate transactions and networks. Sun has long been cited as a takeover target for IBM, Hewlett-Packard, Dell, or Cisco. Bankers have said Sun was searching for a buyer in recent months. Shares of Sun jumped 64 percent in pre-market trading to above $8 per share, while IBM stock was down 2 percent.
