IBM said on Monday that it would buy Canadian business intelligence software company Cognos for $5 billion, following a wave of acquisitions in the industry.
Investors had expected the deal, which represents a 9.5% premium to Cognos`s closing US share price on Friday, after SAP AG`s offer for rival Business Objects in October and Oracle`s purchase of Hyperion Solutions earlier this year.
All three targets make software that analyses businesses by combing through vast amounts of data.
IBM said it had signed a definitive agreement to buy Cognos for $58 a share, compared with its Friday Nasdaq close of $52.98. The shares rose to $57 in pre-market trading on Monday.
IBM said the all-cash deal was subject to shareholder approval and should close in the first quarter of 2008.
SAP`s bid of 4.8 billion euros ($6.8 billion) for Business Objects had sparked speculation in the market that Cognos would become an acquisition target. It and MicroStrategy were seen as the most attractive takeover candidates in that space.
Investors have long speculated that the most likely buyer for Ottawa-based Cognos is IBM because of their existing business partnership.
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