IBM buys Sterling Commerce from AT&T for $1.4 billion

IBM bought Sterling Commerce from AT&T for $1.4 billion. Big Blue said it will lump Sterling Commerce and its 2,500 employees in with its WebSphere middleware unit.

IBM on Monday acquired Sterling Commerce from AT&T for $1.4 billion. Big Blue said it will lump Sterling Commerce and its 2,500 employees in with its WebSphere middleware unit.

The move means that Sterling Commerce has another home inside of a large company. Sterling Commerce, which provides business-to-business supply chain, integration and fulfillment software, was acquired by SBC Communications in 2000 for $3.9 billion. SBC later acquired AT&T in 2005 and took its name. As a unit in AT&T, Sterling Communications continued to make selective acquisitions to round out its e-business portfolio.

According to a statement, IBM will use Sterling Commerce's business to create more supplier automation tools for customers via on-premise applications or cloud computing. IBM CEO Sam Palmisano said two weeks ago that the company would spend about $20 billion on acquisitions through 2015.

Sterling Commerce has more than 18,000 global customers and primarily focuses on transactions for financial services, retail, manufacturing, communications and distribution companies. IBM said it plans to expand Sterling Commerce's footprint in other verticals such as health care.

The deal is expected to close in the second half of the year. AT&T will get a pre-tax gain of $750 million.

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