Oracle to Buy BEA Systems for $8.5 Billion

Posted on 01/16/08 1 Comment

After three months of wrangling over prices, Oracle Corp. will acquire BEA Systems in a $8.5 billion deal.

This means that Oracle will now have an event processing platform, the Oracle WebLogic Event Server to compliment their product line.

Reference:  Oracle Strikes Deal to Buy BEA Systems for $8.5 Billion  (Wall Street Journal)

By JOHN FLOWERS
January 16, 2008 8:14 a.m.

Oracle Corp. said it will acquire BEA Systems in a $8.5 billion deal three months after BEA slapped away an Oracle takeover offer as too low.

Oracle would pay $19.38 for each BEA share, a 24% premium to Tuesday’s close price of $15.58.

Oracle made an unsolicited $6.7 billion, or $17 a share, takeover proposal in October, but the company let it expire weeks later after BEA said the bid was unacceptable. At the same time, BEA added it was looking to start negotiations with interested parties willing to pay at least $21 a share.

“The addition of BEA products and technology will significantly enhance and extend Oracle’s Fusion middleware software suite,” said Oracle Chief Executive Larry Ellison. “Middleware” is a general term for any programming that serves to mediate between two separate and often already existing programs.

BEA Chairman and CEO Alfred Chuang called the deal the culmination of a “diligent and thoughtful process” to maximize stockholder value. The company’s largest shareholder, billionaire Carl Icahn, had called for an auction to sell the business-management-software firm.

BEA is one of the few independent, midsize software companies left in Silicon Valley as the technology industry consolidates. Oracle has for years eyed BEA as an acquisition target.

BEA has been battling Oracle, International Business Machines Corp. and others in the market for middleware. BEA, with a product called WebLogic, pioneered one category of middleware called application servers that are used to build Web services.

Oracle expects the buyout to boost earnings by one cent to two cents a share, excluding items, in the first year after the deal closes. That is slated to happen by midyear.

Shares of Oracle fell in premarket trading to $20.80 after closing Tuesday at $21.31.

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