Sun Microsystems is acquiring open-source database company MySQL in a deal worth $1 billion, Sun announced Wednesday.

MySQL CEO Marten Mickos has told me in the past of his intention to take the Swedish company public. He even rebuffed a 2006 offer by Oracle for the company. In recent months, the volume on the chatter about a looming MySQL IPO was increasing, and you can bet Sun (JAVA) heard it as well. Given the size of the offer, and the current state of the public markets, it’s no surprise MySQL brass and its board finally decided to be acquired.

“This type of transaction is very comparable to an IPO,” says Kevin Harvey, a partner at Benchmark Capital and chairman of the MySQL board. “Our intention was to take MySQL public until Sun changed our minds. From a MySQL shareholder perspective it was a fantastic outcome.”

So who are the big winners here? Clearly Sun, which now adds one of the most respected and largest open-source companies to its software arsenal, which, by the way, it needs to squeeze more revenue from. From a Sun shareholder perspective, though, the price it paid is steep and has already set some analysts to grumbling. The other big winner is Harvey and his firm. Benchmark Capital, one of the earliest investors in MySQL, holds a 26% stake now worth more than $200 million. The other early venture investors include Balderton Capital, Index Ventures and Institutional Venture Partners.

The losers include competing opens-source database company PostgreSQL, for which Sun has been selling support services. And then there is Oracle (ORCL). The leading database company can’t be happy about this outcome. MySQL in general is not directly competitive with the top end of Oracle’s database products, but at the low-end there is competition for customers.

But rather than face a blood bath with Sun over the database business, it’s likely some cooperative relationship can be fashioned, much in the same way that Oracle and IBM (IBM) cooperate in the database business.