IBM-Sun Micro may announce deal next week: source

A worker is silhouetted in front of a huge screen with the IBM logo ahead of the CeBIT fair inside a hall in Hanover March 1, 2008. REUTERS/Hannibal Hanschke

TORONTO (Reuters) - International Business Machines Corp IBM.N and Sun Microsystems Inc JAVA.O may announce a takeover deal next week, a source with knowledge of the matter said on Thursday, adding that IBM's price for Sun was not yet finalized but could be about $9 to $10 per share.

IBM and Sun officials declined to comment.

A takeover of Sun would give IBM a clear lead in the server market against Hewlett-Packard Co HPQ.N and Dell Inc DELL.O. It would also broaden IBM's software portfolio and give it an edge over Cisco Systems Inc CSCO.O, which some see as its biggest rival in the long term.

Reporting by Ritsuko Ando; editing by Jeffrey Benkoe