Banking

Oracle snags BEA Systems for $8.5 billion

In what must be a week of billion-dollar enterprise acquisitions, Oracle has agreed to buy BEA Systems for about US$8.5 billion. BEA investors will receive US$19.38 a share, or 24 percent more than yesterday's market close.

In what must be a week of billion-dollar enterprise acquisitions, Oracle has agreed to buy BEA Systems for about US$8.5 billion. BEA investors will receive US$19.38 a share, or 24 percent more than yesterday's market close.

If you recall, BEA Systems turned down an offer from Oracle of $6.7 billion just three months earlier. Reflecting concerns that Oracle is paying too high a price for BEA, its shares slipped down 31 cents, or 1.5%, to US$21.00. Shares of BEA jumped US$2.99, or 19.2% to US$18.57.

This purchase is Oracle's largest in three years, bringing Chief Executive Officer Larry Ellison's acquisitions to more than US$33 billion.

The BEA acquisition is expected to help Oracle challenge IBM's market lead in middleware. In a conference call with Bloomberg, Ellison noted: "Middleware requires a highly specialized, technically sophisticated sales force. It's difficult to obtain this kind of talent."

Excerpt from ComputerWorld:

[Oracle President] Phillips also said that the acquisition would accelerate innovation at the two companies. "Together, Oracle and BEA will provide a series of complementary middleware solutions, including identity management, business intelligence and performance management, enterprise content management, and vertical-specific technologies like a communications service delivery platform," he said.

Additional reading:

Subject to regulatory and shareholders approval, the deal is expected to close by mid-year.

About

Paul Mah is a writer and blogger who lives in Singapore, where he has worked for a number of years in various capacities within the IT industry. Paul enjoys tinkering with tech gadgets, smartphones, and networking devices.

1 comments
daniel.nelson
daniel.nelson

As much as this makes sense for Oracle and BEA as companies this is turbulent news for the administrators and developers of WebLogic. It seemed clear on the call that the main platform Oracle is going to be pushing is Fusion. Where does that leave the thousands of WL customers? Many companies are going to be faced with migration decisions or decisions on how to effectively support a mixed environment of web application servers. There needs to be a way to easily migrate applications from one web application server to others (even if different flavors ? WebSphere, BEA, Oracle, JBoss?). My company is taking one approach to help customers with this turbulence. If you want to read more, here's a link to our press release on the matter. http://www.phurnace.com/press/perfectly-timed-with-today-s-bea-acquisition-phurnace-plans-support-for-oracle-oas-to-bea-we.html