Unconfirmed reports suggest that IBM is in talks to buy struggling Sun Microsystems for around $6.5 billion (£4.5 billion).
If the deal comes off it will be the biggest- and possibly most important - acquisition in Big Blue's long history. The Wall Street Journal was the first to report the talks, which put a roughly 100 percent premium on Sun's Tuesday closing price of $4.97 per share on the NASDAQ.
The deal will be interpreted as another round in IBM's increasingly tense battle to outsmart rivals HP, Cisco and others for a share of the server market, especially the part of that market serving data centres.
No source at either company has been prepared to comment on the WSJ story directly, but neither has it been denied. The company's share price rose sharply in Frankfurt trading to reach 6 Euros on Wednesday morning.
It has been known for some time that Sun's CEO, Jonathan Schwartz, has been interested in seeing the company acquired. According to an unnamed WSJ source, HP had already declined such a deal.
The decision to buy Sun is brave given the extent to which the once-pioneering company's star has waned and the very different corporate cultures of the two giants. It is possible that IBM sees the relatively depressed prices of Sun and other companies as too good an opportunity to miss.
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