One of the world leaders in business software, SAP of Germany, announced it has come to an agreement with Business Objects of France to buy them out for $6.8 billion (4.8 billion euros).
SAP will pay $53.4 dollars per share in cash for the company. Business Objects generated $1.3 billion in revenue last year. SAP, which services about 41.200 clients, sold over 3.1 billion euros of software licenses in 2006. SAP is a direct competitor with Oracle (ORCL) in the U.S.
This evidently signals a drastic change in strategy for SAP, as it had been focusing on growing organically. When you consider their purchase of Hyperion in March for $3.3 billion, they are definitely responding to Oracle's huge expenditure of over $25 billion for acquisitions since 2004.
"The Business Objects board of directors has approved the tender offer agreement between the two companies and anticipates recommending the offer to its shareholders subject to fulfillment of certain regulatory requirements," the two companies said in a joint statement.
The deal, which is projected to close in the first quarter of 2008, will have Business Objects continue operating as a stand-alone business.
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