>> Two companies near and dear to the heart and wallet of Larry Ellison getting together. Oracle, the company he cofounded and is chairman of, paying $9.3 billion for cloud computing outfit NetSuite, in which he was an early investor and still owns 40%. That set NetSuite's shares up 18% in early trading Thursday and made Ellison a bit richer.
His personal stake in NetSuite is now about $3.7 billion. He made around one billion from the premium Oracle said it would pay. Reuters' breaking news reporter Robert Cyran explains.>> It is interesting cuz Larry Ellison and his family own about 45% of NetSuite. That's the company that they're buying.
So he's got a conflict of interest. The price we're paying actually looks kind of reasonable, but the problem is that NetSuite grew incredibly fast for the past few years and it competes with Oracle. So arguably you could say that Ellison by investing in this, has taken money out of Oracle shareholders.
>> NetSuite is a pioneering company in cloud computing software, technology which allows data to be stored on remote servers. And Ellison has kept the company on a close leash since taking it public in 2007. And has a close relationship with CEO, Zach Nelson, who used to work for him at Oracle.
The deal will give Oracle a weapon to push deeper into the quickly growing cloud market where competitors Amazon and long-time rival, Microsoft, have already made significant moves. Oracle says it's expecting to close deal by the end of the year, predicting it will immediately bolster the company's earnings.