Thursday, February 26, 2004

U.S. to block Oracle's takeover of PeopleSoft

Not a big surprise, but DOJ has made it official. In his announcement, Hewitt Pate, head of DOJ antitrust division said, "We believe this transaction is anti-competitive -- pure and simple. " Oracle has not yet indicated whether it will sue the Justice Department over its decision.

For my take on the competitive aspects of this deal, see my post on Feb. 13.

Update, Feb. 27: Oracle says it will sue the Justice Department over its decision to oppose the merger. "The Department's claim that there are only three vendors that meet the needs of large enterprises does not fit with the reality of the highly competitive, dynamic and rapidly changing market," says Oracle in a press release. It is also extending its tender offer until June 25.

Update, Feb. 27: Just got this tidbit from the San Jose Mercury News. It looks like Oracle is going to have a hard time explaining this:
In the court filing, the Justice Department included a 2002 quote by Oracle co-president Charles Phillips -- who then worked as an industry analyst for Morgan Stanley -- saying that the "back-office applications market for global companies is dominated by an oligopoly comprised of SAP, PeopleSoft and Oracle.''
My point exactly.

No comments: