Oracle to acquire BEA in $8.5 billion cash deal

18 January, 2008:

In a major cash deal, Oracle is all set to buy middleware maker BEA Systems. Reports said that the deal is expected to be closed for $8.5 billion in cash.

The reports added that Oracle will pay close to $19.38 a BEA share and is expected to close the acquisition by mid-2008. BEA had rejected Oracle’s earlier offer price of $17 a share. Bea had then said that it wanted $21 a share for any party to enter acquisition talks with the company.

Problems had followed the rejection of the offer when BEA's largest shareholder Carl Icahn had threatened to launch a proxy fight upset over BEA’s rejection of the offer.

However, BEA sorted out the issue by reaching an agreement to show Icahn its financials under a nondisclosure agreement. This, said reports, was meant to show that it was worth holding out for more than $17 a share.

Now with the current deal okayed, the development brings to an end several months of discussions on the same. The agreement with Oracle is being seen as the culmination of the process. BEA Systems had been facing growing competition from such rivals as Microsoft, Oracle, and various open-source companies.

The acquisition, when it is complete, will see Oracle put finishing touches to its Fusion Middleware, by using BEA's technology to enhance its offerings. BEA's WebLogic Java Server will be coupled with the various components of Oracle's Fusion software suite.

BEA has been a pioneer in middleware and the acquisition would accelerate the adoption among the combined companies' customers of Java-based middleware technologies and service-oriented architectures. The buy will also signal Oracle's growth in the Greater China region as well as in industries like telecom and more. Oracle will in fact now be in a stronger position with the deal expected to give Oracle a presence in the high-end of the middleware market.

 

 

 
 

 

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