SAP said today that it will acquire Sybase in a cash offer of $65 per share, or about $5.8 billion, a move that gives SAP the tools that it needs to battle Oracle in the business software game. The companies said they expect the deal to close in the third quarter.
Last year, the two companies SAP entered into a non-exclusive partnership that was intended to build a bridge between SAP's enterprise software offering and the mobile platform provided by Sybase. The acquisition will allow SAP to push deeper into the mobile space, a must-have tool of business software today, as well as enhance that analytics processing technology that Sybase brings.
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In a statement, SAP co-CEO Bill McDermott said:
With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world's best business software with the world's most powerful mobile infrastructure platform. This is a game-changing transaction for SAP and Sybase customers, who will be better able to connect their employees with key functionality and information from anywhere and make it easier for companies to make faster, more informed business decisions in real time. With SAP's customer-centric approach, we are resolute in our commitment to support Sybase customers to be best-run businesses.
Mobile is one of the keys here. Altimeter Group analyst Ray Wang is quoted in the Wall Street Journal that the Sybase technology will help SAP attract large enterprise companies like financial institutions that want to unlock access to IT systems for their employees through mobile devices.
Further, Wang noted that SAP, as a reseller of Oracle to the tune of about $1 billion in Oracle databases annually, would become less dependent on Oracle - and therefore reduce the amount of money being sent to a competitor.
Rumors of the deal earlier in the day sent shares of Sybase skyrocketing, up 35 percent in regular trading and on the upswing during the after-hours. Shares of SAP were down slightly in regular trading and slipped a bit more in the after-hours.