PeopleSoft is set to acquire smaller rival JD Edwards & Co. for $1.7 billion in stock, in order to bolster its line of business programs, reports news agency Bloomberg.
It is reported that the payroll and inventory software company has agreed to pay 0.86 share for each share of J.D. Edwards. The deal will be completed this year, the companies said.
Last week, JD Edwards reported its first loss in five quarters as businesses spend less on software and computers. Once the two companies combine, it is expected that the combination will make them the number two maker of business application programs, after Germany`s SAP AG.
Ryan Davies, an analyst with US Bancorp says that consolidation is an important step in the enterprise software market, and this acquisition will boost PeopleSoft`s position in providing software to manufacturers.
The irony for the South African market is that the local branch of JD Edwards was recently named the top-performing branch, whereas Peoplesoft is relatively small in comparative terms. "It`s a bit like a Chihuahua devouring a Dobermann," said an industry insider.
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