StorageTek will become integrated within Sun's organization following completion of the proposed transaction by early Fall 2005.

Sun Microsystems, Inc.  and Storage Technology Corporation, a provider of storage solutions, today announced that they have entered into a definitive agreement under which Sun will acquire StorageTek.

Under the terms of the agreement approved by both boards of directors, StorageTek stockholders will receive $37 per share in cash for each StorageTek share for an aggregate value of approximately $4.1 billion, including the assumption of employee stock options. Sun expects the transaction to be accretive to non-GAAP earnings in the first 12 months following the closing. Following completion of the proposed transaction in late Summer/early Fall 2005, StorageTek will become fully integrated within Sun's organization. In the interim, a joint team with representatives of both companies will develop integration plans that build upon the technological, product and cultural synergies and the best business and product development practices of both companies.

"Sun's technical and financial strength puts us in a great position to act as a consolidator in the IT industry. This acquisition is part of an ongoing strategy to respond to customers seeking to rationalize their datacenter purchases - to free up time and dollars to focus on compliance, architectural integration, security and, of course, the bottom line," said Scott McNealy, chairman and chief executive officer, Sun Microsystems, Inc.

"By joining forces with Sun to form a combined enterprise with greatly enhanced technological, operational and financial resources, we are positioning that enterprise for accelerated growth and solid performance for years to come. I strongly believe that for StorageTek and all our constituents, this is the right transaction, with the right partner, for the right reasons, at the right time," said Patrick J. Martin, chairman, president and chief executive officer, StorageTek.