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.

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:

• Oracle blinks (Forbes)
• BEA accepts $8.5 billion bid from Oracle (New York Times)
• Oracle wins over BEA, agrees to $8.5 billion purchase (Bloomberg)
• Oracle to acquire BEA Systems (Oracle press release via PR Newswire)

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