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ORCL Stock Drops 5% as Oracle Buys Cerner for $28.3B in Its Biggest Acquisition Ever

UTC by Ibukun Ogundare · 3 min read
ORCL Stock Drops 5% as Oracle Buys Cerner for $28.3B in Its Biggest Acquisition Ever
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Oracle intends to expand Cerner’s businesses across many countries globally.

Computer software company Oracle Corporation (NYSE: ORCL) is acquiring American supplier of health information services, devices, and hardware Cerner Corporation (NASDAQ: CERN). Oracle and Cerner jointly announced the acquisition in a press release on the 20th of December. According to the announcement, the computer software company is buying Cerner for $95 per share or approximately $28.3 billion.

ORCL Down 5% as It Purchases Cerner

In reaction to the acquisition announcement, Oracle stock lost 5% on Monday while Cerner shares grew less than 1% on the same day. Before then, Cerner advanced almost 13% on Friday due to the initial reports of the deal with Oracle.

Oracle intends to expand Cerner’s businesses across many countries globally. As such, Cerner will generate more funds for Oracle as it becomes an additional engine for revenue growth over the coming years. Per the announcement, the deal is still subject to some regulatory approvals and will expectedly close in 2022. Also, some closing conditions are still to be met before the transaction officially closes. In addition, Cerner shareholders need to tender a majority of CERN’s outstanding shares.

Oracle offers best in class cloud infrastructure to support digital modernization. The computer software company brings solutions to the world’s largest industries. Some of the industries covered by Oracle include Pharmaceuticals, Hospitality, Financial Services, Utilities, Telecoms, Construction & Engineering, and many more. On the other hand, Cerner serves as a complementary business to Oracle. The company provides digital information systems which medical practitioners use in hospitals.

Oracle chairman and chief technology officer Larry Ellison commented on the acquisition deal between Oracle and Cerner. Ellison is confident that both companies can jointly transform healthcare delivery. He said that Oracle and Cerner could support medical professionals by providing better information that will enable them to make better decisions in treating their patients.

Cerner to Stand as Industry Business Unit within Oracle

Following the acquisition, Cerner will serve as an Industry Business Unit within Oracle. The chairman and chief technology officer noted:

“With this acquisition, Oracle’s corporate mission expands to assume the responsibility to provide our overworked medical professionals with a new generation of easier-to-use digital tools that enable access to information via a hands-free voice interface to secure cloud applications. This new generation of medical information systems promises to lower the administrative workload burdening our medical professionals, improve patient privacy and outcomes, and lower overall healthcare costs.”

Cerner Corp. boasts of an impressive performance in the last twelve months. The company has been steadily growing, increasing nearly 17% in a year. Since the year began, CERN has climbed 15.30%, advancing further by 13,37% in the last three months. In addition, the company has jumped 22.40% over the past month and 17.12% in the last five days. Cerner Corporation is trading at $90.61 in extended trading session at press time.

Meanwhile, Oracle has lost 1.40% in a month. Also, the company has shed more than 8% in the last five days.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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