Oracle will acquire the outstanding shares of enterprise infrastructure software company BEA Systems, at $19.375 per share, in cash, in an $8.5 billion deal.
In a joint statement, the companies said the net deal value is $7.2 billion because BEA has cash on hand of $1.3 billion.
"We expect this deal to be accretive to Oracle's earnings by at least 1c to 2c on a non-GAAP [generally accepted accounting principles] basis in its first full year after closing," says Oracle president and CFO Safra Catz.
"Over the past several months, our board of directors, with the assistance of independent financial and legal advisors, has reviewed various ways to maximise stockholder value, including engaging in discussions with third parties about a possible sale of the company," says Alfred Chuang, BEA's chairman and CEO.
According to CNN Money, talks between the companies have been in deadlock for months. It says Oracle first dangled $17 per share, or $6.7 billion, for BEA last October, which the company's board rejected as insufficient.
Chuang says BEA's board unanimously approved the new offer. The company expects to close the deal by mid-2008, "subject to BEA stockholder approval, certain regulatory approvals and customary closing conditions".
"The addition of BEA products and technology will significantly enhance and extend Oracle's Fusion middleware software suite," says Oracle CEO Larry Ellison.
He says the primary advantage of the deal for customers will be the interoperability of BEA's middleware products with Oracle's.
Oracle expects the transaction to accelerate the adoption of Java-based middleware technologies and service-oriented architecture; advance innovation in enterprise applications infrastructure software; extend its strategic relationships with customers and partners; and increase the company's penetration in key regions like China.
Related stories:
Oracle allows integration
Oracle looks to Oz
Share