Enterprise software maker Infor is set to acquire rival SSA Global for about US$1.4 billion.
Infor develops business software for the manufacturing and distribution companies, while SSA Global's applications target manufacturing, consumer and services industries.
"With this acquisition, Infor will become the third largest enterprise software provider in the industry with approximately US$1.6 billion in revenue," Jim Schaper, chairman and CEO of Infor, said in a statement.
The move is expected to pit Infor against market leaders Oracle and SAP.
In Asia, however, both Oracle and SAP have a strong market presence, and it would be a hard for Infor to break their strongholds, said Alan Tong, IDC's Asia-Pacific research manager for enterprise applications, in a phone interview.
Noting that SSA Global "took a while" to consolidate its acquisition of Baan in 2003, Tong said it would take considerable effort and challenge for Infor to manage and integrate multiple product portfolios. Infor also acquired Mapics last April.
Under the latest agreement, which has been approved by SSA Global's special committee of independent directors as well as the board of directors, Infor will pay US$19.50 per share in cash to SSA Global's shareholders.
The parties anticipate closing the transaction in the third calendar quarter of 2006.
Mike Greenough, SSA Global's chairman, president and CEO, said: "In a rapidly consolidating marketplace, we have seen that size and scale matter. This transaction brings value to all of our key stakeholders… our investors, our customers and our employees."
Infor's announcement follows a spate of merger activities in the mid-market ERP space, including Lawson's acquisition of Intentia for US$607 million earlier this month. J.D. Edwards was acquired by PeopleSoft, which was in turn bought over by Oracle.