In an all-cash deal valued at euro 215 million ($340 million / Rs1440 crore) IBM is acquiring French logistics and back office software developer, ILOG, in a bid to strengthen its portfolio of business process management software. Thi is IBM's 12the acquisition during the year.

Underr the deal IBM will pay ILOG shreholders euro 10 per share, representing  a premium of a 37 per cent premium to the closing price on Friday, 25 July, or a  56 per cent compared with Ilog's one-month average closing share price prior to July 28.

The cash tender offer will be at a price of €10 per ordinary share and the dollar equivalent per ADS.

ILOG's board of directors has approved the transaction between the two companies and, subject to the receipt of a satisfactory fairness opinion regarding the financial terms of the offer, is expected to give a final recommendation prior to 15 September, following which the offer should be filed with the French stock exchange regulator, AMF.

IBM has received commitments from certain shareholders to tender their shares to the contemplated offer, which represent approximately 10 percent of ILOG's issued share capital.

The public tender offers will be conditional upon US and EU antitrust clearances and a 66.67 per cent share capital and voting rights minimum tender acceptance condition (on a fully diluted basis). The offer in France will only be opened for acceptances once the AMF and the French ministry of economy have granted their respective clearances.

When completed, the acquisition of ILOG will strengthen IBM's BPM and SOA position by providing customers a full set of rule management tools for complete information and application lifecycle management across a comprehensive platform including IBM's leading WebSphere application development and management platform.

ILOG's customers include American Express, Samsung, GlaxoSmith Kline and MetLife. IBM and ILOG have been associated with each other for several years and Big Blue is its top busines associate.

"ILOG technology has the potential to add significant capability across IBM's entire software platform and bolster its existing rules management offerings," IBM said in a statement. This includes improved rules and business optimization capabilities for information mfferings, better visualisation for Lotus products, enhanced optimisation within Tivoli solutions, and efficient supply chain management assets for planning and scheduling.

"Companies across all industries are looking for technologies to help them manage their processes with more flexibility so they can keep up with changing business conditions," said Tom Rosamilia, general manager, IBM WebSphere. "ILOG's software allows businesses to more effectively manage and automate the decision making process, giving companies an opportunity to react with incredible speed and accuracy. IBM has partnered with ILOG for over a decade, and by adding ILOG's capabilities to IBM's software portfolio, this is a great combination to provide value to our clients."

Beyond end-user customers, ILOG has more than 500 original equipment manufacturer, solution integrator, and independent software vendor partners today. IBM also has an extensive partner community which will benefit from access to the ILOG technologies and extend ILOG's reach. In addition to a successful network of more than 30 specialized partners and 850 personnel, ILOG brings extensive skills through a wide base of local and regional experts.

''We are very excited about this opportunity to join a world leader such as IBM, a long valued partner with shared core values. This combination will allow us to dramatically extend our market reach and realise the full potential of all of our technologies while protecting investments of ILOG's customers now and into the future," said Pierre Haren, ILOG chairman and CEO.