8-K

   1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 8-K
                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                                December 7, 2000
           -----------------------------------------------------------
               (Date of Report) (Date of earliest event reported)

                             SUN MICROSYSTEMS, INC.
           ----------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                     0-15086                  94-2805249
- -----------------------------    ------------------      ----------------------
(State or other jurisdiction         (Commission             (IRS Employer
     of incorporation)               File Number)           Identification No.)


901 San Antonio Road, Palo Alto, California                       94303
- -----------------------------------------------            -------------------
(Address of principal executive offices)                        (Zip Code)



Registrant's telephone number, including area code:             (650) 960-1300
                                                           --------------------

                                       N/A
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)

Item 2.  Acquisition or Disposition of Assets

         On September 18, 2000, the registrant entered into an Agreement and
Plan of Merger and Reorganization (the "Merger Agreement") by and among the
registrant, Azure Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of the registrant ("Merger Sub"), and Cobalt Networks,
Inc., a Delaware corporation ("Cobalt"), pursuant to which Merger Sub would be
merged with and into Cobalt, with Cobalt surviving the merger as a wholly-owned
subsidiary of the registrant, and each share of Cobalt common stock issued and
outstanding at the effective time of the merger would be cancelled and converted
into the right to receive 0.50 of a share of common stock of the registrant
(including the associated rights under the registrant's stockholder rights
plan).

         On December 7, 2000, the registrant closed the transactions
contemplated by the Merger Agreement, including the merger of Merger Sub and
Cobalt. As a result of the merger, each issued and outstanding share of Cobalt
common stock was cancelled and converted into the right to receive one share of
common stock of the registrant. The exchange ratio for the merger was adjusted
from the exchange ratio of 0.50-for-one reflected in the Merger Agreement to a
new exchange ratio of one-for-one as a result of the two-for-one forward stock
split of the common stock of the registrant, which was paid in the form of a
stock dividend on December 6, 2000.


   2



Item 7.  Financial Statements and Exhibits

         (c)  Exhibits

         99.1 Press release dated December 7, 2000.

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: December 7, 2000                      SUN MICROSYSTEMS, INC.


                                            By: /s/ JONATHAN I. SCHWARTZ
                                               ---------------------------------
                                               Jonathan I. Schwartz
                                               Senior Vice President, Corporate
                                               Strategy and Planning



                                       2
   3

                                INDEX TO EXHIBITS


Exhibit
99.1     Press Release dated December 7, 2000


                                                                   EXHIBIT 99.1






                                       3

EX-99.1

   1
SUN MICROSYSTEMS COMPLETES ACQUISITION OF COBALT NETWORKS

Cobalt Networks Becomes The Server Appliance Business Unit of Sun

PALO ALTO, Calif., December 7, 2000 - Sun Microsystems, Inc. (NASDAQ: SUNW),
today announced that it has completed the acquisition of Cobalt Networks, Inc.
based in Mountain View, Calif., a provider of server appliances for Internet
Service Providers (ISPs), Application Service Providers (ASPs), and small- to
medium-sized businesses.

In accordance with the terms of the acquisition each share of Cobalt Common
Stock was converted into 1.0 share of Sun Common Stock, after adjusting for the
2-for-1 forward stock split effected by Sun on December 6, 2000 in the form of a
stock dividend on all then outstanding shares of Sun Common Stock. Cobalt
Networks products extend Sun's network computing leadership to server
appliances.

With the close of the deal, Cobalt becomes the server appliance business unit of
Sun headed by Stephen DeWitt, vice president and general manager for Appliances.
DeWitt will report to John McFarlane, executive vice president, Network Service
Provider group. The integration of Cobalt's products will enhance Sun's position
in the growing server appliance marketplace and reinforce Sun's long-standing
focus on network computing.

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision -- The Network Is The Computer --
has propelled Sun to its position as a leading provider of industrial-strength
hardware, software and services that power the Internet and allow companies
worldwide to dot-com their businesses. With $15.7 billion in annual revenues,
Sun can be found in more than 170 countries and on the World Wide Web at:
http://www.sun.com.

                                     # # #

Cobalt Networks, Inc., The Cobalt logo, Cobalt Networks, Cube, Cobalt Qube,
Qube, Cobalt RaQ, RaQ, Cobalt CacheRaQ, Cobalt NASRaQ, Cobalt StaQware and
BlueLinQ are trademarks of Cobalt Networks, Inc. Other product names are
trademarks or registered trademarks of their respective owners.

Sun, Sun Microsystems, the Sun Logo, and The Network Is The Computer are
trademarks or registered trademarks of Sun Microsystems, Inc. in the United
States and other countries.