SAP to buy rival Sybase for $5.8 billion

The acquisition would be second largest in SAP’s nearly 40-year history, and comes after departure in February of Chief Executive Leo Apotheker, who was replaced by co-CEOs Bill McDermott and Jim Hagemann Snabe.

SAP’s main rival, Oracle Corp, was first major software maker to aggressively pursue acquisitions and has spent more than $42 billion to buy about 60 companies.

California-based Sybase sells programmes that make it easy for workers to access business software via smartphones and other mobile devices. SAP already uses the technology to let customers access its applications when they are on the road.

“We want to make sure SAP solutions can be accessed from all leading mobile devices. The acquisition of Sybase will allow us and our partners to do just that,” Snabe said on a conference call. SAP has agreed to pay $65 per share in cash for Sybase, which is the world’s No 4 provider of database software, the companies said.

That represents a 56 per cent premium to Sybase’s Tuesday closing price on the New York Stock Exchange. Sybase also sells a powerful database that large companies, such as banks, use to store sensitive information. It is the fourth-largest maker of database software after Oracle, IBM and Microsoft Corp.

SAP said it would fund the deal with cash on hand and a Euro 2.75 billion loan facility. The companies said they expect the transaction to close during the third quarter, immediately adding to SAP’s earnings.

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