Oracle completes BEA acquisition
29-04-2008
by Deirdre McArdle

Oracle's acquisition of rival enterprise software firm BEA Systems has been approved by the European Commission.

BEA makes "middleware", which allows business computer systems to interact with each other. This means that companies are able to integrate computer systems running on pieces of software that were not originally developed to communicate with each other.

While Oracle already sells similar products to those of BEA, the Commission found that the "horizontal overlap" between the companies' activities would not "give rise to competition concerns", in particular since Oracle and BEA don't compete head-to-head.

The Commission concluded that the transaction would not significantly impede effective competition, saying that there were plenty of strong competitors in the overall middleware market, such as IBM, Sun, Microsoft and SAP, and customers would have no problems finding sufficient alternative suppliers.

The acquisition, valued at USD8.5 billion, was approved by US anti-trust agencies in February of this year. This latest nod from European authorities signifies closure of the deal, a move heartily welcomed by Oracle.

"The addition of BEA will accelerate innovation by bringing together two companies with a common vision of a modern service-oriented architecture (SOA) infrastructure," said Oracle president Charles Phillips. "Together, Oracle and BEA will provide a series of complementary and well-engineered middleware products, allowing customers to more easily build, deploy and manage applications in a secure environment."

Oracle's pursuit of BEA began in October last year when Larry Ellison's firm made a surprise offer of USD17 per share for BEA Systems. While BEA initially rejected the bid out of hand, within days it was saying it would happily entertain suitors at USD21 per share. Oracle refused to bite though and seemed to simply walk away from the deal. However, in January, following pressure from Carl Icahn, BEA's biggest stockholder, BEA's board of management agreed to a raised offer from Oracle of USD19.375 per share.