Date Posted: 10/10/2007
SAP to acquire Business Objects for $6.8B
European business-software combination set to close first quarter, 2008; SAP shares plunge on news.
NEW YORK (AP) -- SAP AG has agreed to acquire software maker Business Objects SA in a tender offer valued at $6.8 billion (€4.8 billion), the companies said Sunday.
Shares of SAP (Charts) fell 5.7 percent in electronic trade Monday morning on the news.
Under the terms of the agreement, SAP, the world's largest maker of business software that helps companies do back-office work such as payroll, inventory management and accounting, will pay $59.35 (€42) per share in cash.
SAP, based in Walldorf, Germany, said the board of Business Objects, based in Paris, France, expects to recommend the offer to its shareholders.
"We are highly committed to the next generation of applications serving business users," said Henning Kagermann, SAP's chief executive. "The combination of SAP and Business Objects in their respective domains will benefit customers, prospects, partners, employees and shareholders."
Kagermann said acquiring Business Objects keeps with SAP's strategy to double its addressable market by 2010.
"SAP will accelerate its growth in the Business User segment, while complementing the company's successful organic growth strategy," he said.
Business Objects will operate as a stand-alone business as part of the SAP Group, and Business Objects customers will gain the advantage of application alignment for business analytics, the companies said.
"The combination of Business Objects and SAP means that we can truly amplify the reach of Business Intelligence - from the C-suite to Main Street," said Bernard Liautaud, chairman and founder of Business Objects.
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John Schwarz would continue as the CEO of Business Objects and is expected to become a member of SAP's executive board, while Doug Merritt, corporate officer for SAP's Business User segment, would join the Business Objects entity and report to Schwarz, the companies said.
SAP said its supervisory board intends to propose Liautaud's election to the board at the company's next shareholders meeting. Until then, he will advise Kagermann on strategy and integration.
The transaction is expected to close in the first quarter of 2008, contingent on a majority of Business Objects shareholders tendering shares, as well as clearance by U.S. and European Union antitrust regulators.
SAP said it expects the transaction to add to the company's earnings per share by 2009.
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