Oracle announced this morning that it has reached agreement with BEA Systems to acquire the middleware vendor for $19.38 per share. That's higher than Oracle's original offer of $17 per share back in October, but lower than BEA's demand of $21.
Rather than counter back in October, Oracle simply let its offer expire. No one else stepped in as a white knight, which strengthened Oracle's position as the only serious contender. It didn't hurt that major BEA shareholders--specifically Carl Icahn--were pushing for the sale of BEA.
In contrast to his hostile tone in the first go-round, BEA Chairman and CEO Alfred Chuang sounded a more positive note today:
This transaction is the culmination of that diligent and thoughtful process, and we believe it is in the best interests of our shareholders. I am confident our innovative products, talented employees and worldwide customer base will be key contributors to the success of the combined company over the long term. We look forward to working with Oracle toward a successful completion of the transaction.
The deal will give ownership of one of the last remaining major independent software vendors. The deal also gives Oracle access to BEA's installed base. Most of Oracle's acquisitions in the past three years have been applications developers. BEA's client base will be fertile ground for Oracle to sell those applications.
Not to be overlooked is BEA's technology, which Oracle will incorporate into its own Fusion middleware--the foundation of its service-oriented architecture (SOA) platform, the glue that it uses to hold together its many applications.
All around, the deal is good for Oracle and BEA. Whether BEA customers will agree remains to be seen. But Oracle has done a fairly good job of keeping customers of its acquisition targets satisfied with the transition to new ownership. I would expect to see the same here.
The
Wall Street Journal has a brief summary of the deal.
There's a
special page on Oracle's website about the deal along with information for customers.
Related postsOracle withdraws offer for BEA SystemsOracle bids for BEA Systems
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