Oracle in £5.4bn PeopleSoft deal
Oracle's bid to take over its arch-rival in the business applications software market, PeopleSoft, was finally resolved yesterday after the two companies said they had agreed the terms of an acquisition.
Oracle's bid to take over its arch-rival in the business applications software market, PeopleSoft, was finally resolved yesterday after the two companies said they had agreed the terms of an acquisition.
Oracle, which is led by its chief executive Larry Ellison, revealed it completed the deal to buy PeopleSoft after agreeing over the weekend to increase its previous offer by 10 per cent. The acquisition, which is valued at $10.3bn (£5.4bn), should be completed next month.
"This is a major turning point for the entire enterprise software industry," Oracle's co-president Charles Phillips said yesterday. The fusion of the two former rivals will create the world's second largest business applications company, after SAP of Germany.
It also means an end to a feud between the management of the two companies that had often become personal. As an immediate consequence, a trial that had been due to begin soon in Delaware to hear grievances in the struggle will no longer happen.
The truce took many in the industry by surprise. PeopleSoft had been consistently and aggressively opposed to the acquisition. The landscape shifted suddenly when PeopleSoft made contact with Oracle over the weekend and invited the company to begin earnest negotiations.
Under the deal, Oracle will pay $26.50 per share for PeopleSoft, a 10 per cent increase on the original $24-per-share bid that had earlier been rejected. The price was agreed after PeopleSoft for the first time offered the other side a detailed look at its books and earnings prospects.
But the future for the 12,000 employees of PeopleSoft is still clouded. Oracle had once intimated it would lay off almost the entire workforce but more recently suggested it may retain about 6,000 PeopleSoft employees.
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