SAP to acquire Sybase Inc for $5.8 billion
13 May 2010
SAP AG's new co-chief executive officers Bill McDermott and Jim Hagemann Snabe are in a rush to beat Oracle Corp in software for wireless internet transactions with a $5.8 billion acquisition of Sybase Inc.
Sybase shareholders will get $65 a share, according to Walldorf, Germany-based SAP's statement yesterday. According to analysts this is 56 per cent higher than the $41.57 closing price on 11 May 11, which was the day before the discussions became public. According to SAP spokesman Saswato Das the deal includes around $506 million in Sybase debt.
The acquisition enables SAP to offer software that helps corporate customers run applications on mobile devices. Three months into their tenure, McDermott and Snabe are leveraging acquisitions to reverse the sales drop that led to the departure of their predecessor, Leo Apotheker. SAP had kept away from takeovers as Oracle spent more than $42 billion on 64 companies since January 2005.
Companies use SAP's business applications to keep track of orders, manage inventory levels and plan delivery schedules. Sybase is into software that allows users to do business from mobile devices.
With the acquisition, SAP will be able to offer solutions for customers that want employees to use tablets and smartphones while working.
According to McDermott this would literally connect the shopfloor to the corner office.
Analysts say the deal makes sense as SAP is betting heavily on in-memory computing and mobile applications as the future of computing and Sybase brings to the table a capability for high- speed in-memory databases and a mobile application platform.
