Monday, 8 October 2007

SAP Says Will Buy Business Objects

German software company SAP has said it will buy French business intelligence software maker Business Objects for USD 6.8 billion.

Business Intelligence is one of the fastest growing segments globally and the move by SAP underlines the appeal of companies whose software is used to sift through the voluminous data that corporations now accumulate on their own and over the Web.

There’s been a trend of sorts by bigger companies to acquire business intelligence companies so that BI software can be bundled along with the software that companies such as Oracle and SAP offer. In one of such large deal, Oracle agreed to buy Hyperion, a business intelligence software company, for USD 3.3 billion. Oracle and SAP are staunch rivals not leaving any chance to outwit each other.

The deal is a departure from SAP’s longtime approach of shunning big acquisitions. But in a conference call yesterday afternoon, Henning Kagermann, the chief executive of SAP, said that the purchase of Business Objects was an exceptional case.

“It’s a fast-growing market — business intelligence,” Kagermann said. “This is an important step forward for us, and it accelerates our growth strategy.”

Business Objects is American-French software with dual headquarters in Paris and San Jose, California.

The SAP offer of 42 euros in cash is roughly 20 percent above last week’s closing price for Business Objects, which places a value of more than 4.8 billion euros (USD 6.8 billion) on the company.

John Schwarz, the chief executive of Business Objects, said in the conference call that 40 per cent of his company’s customers were also SAP customers. “We have a tremendous opportunity to align and package solutions together,” he said.