Why is Oracle buying Cerner for $30 billion?

Oracle Corp. (ORCL) announced its intention to acquire the business of a provider of software solutions for medical institutions, Cerner Corporation (CERN). Hence, the strong growth of CERN quotations; at the auction on December 29, the stock was worth $90.49. Rumors about the deal appeared on Friday – they were published by the Wall Street Journal. 

It was about Oracle offering $95 per CERN share, which means the transaction value is about $30 billion in cash. The significant premium attracted investors. Oracle confirmed the rumors, announcing its intention to buy Cerner. The deal has not yet by shareholders and is to be closed no earlier than next year. 

The Oracle giant has enough funds to finance a deal that costs less than annual revenue. However, Oracle investors took the news negatively due to the impending deterioration in profit indicators associated with the purchase. At the same time, the acquisition could become one of Oracle’s long-term drivers. Cerner tools use connectivity to cloud services so that they can be a valuable addition to Oracle’s extensive cloud ecosystem. In particular, Oracle plans to use the famous set of Cerner solutions in mobile healthcare. Oracle has such significant expectations that the company’s management has announced the potential to change the healthcare industry worldwide. 

 It is possible to combine the large-scale Oracle ecosystem and the unique developments of Cerner, for example, a real-time patient awareness system to maximize the effectiveness and safety of prevention and treatment procedures. In addition, Cerner spends almost $1 billion on research and development and more than 26 thousand. Partners worldwide, and revenue in 2020 amounted to $ 5.5 billion.