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Oracle reinforces application business by acquiring Indian i-flex

The world’s second-largest software provider, Oracle Corp. has agreed to pay about £514mn, or $909mn, to acquire a majority share in i-flex solutions, India’s biggest banking software developer.

Published :
Wed, 03 Aug 2005 09:05
By : Cedric Benson
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The world’s second-largest software provider, Oracle Corp. has agreed to pay about £514mn, or $909mn, to acquire a majority share in i-flex solutions, India’s biggest banking software developer.

Oracle has consummated six takeovers till now over this year, in its bid to fortify its software division and explore new arenas of development. i-flex will help Oracle fork out of its usual role of developing “back-office software” and venture out into the consumer sector, creating automated banking and investment management software. Furthermore, this takeover will prove to be a shot in the arm for Oracle's status in India since its rival firm, SAP AG, has also been gearing up for added investments and growth.

In fact, the co-president of Oracle, Charles Phillips, calls banking the “Granddaddy” of all industries as far as IT spending is concerned, as banks “spend a lot more on technology compared with other industries.”

Oracle’s acquisition of i-flex will involve 41 percent stake of Citigroup Venture Capital International, valued at $593 million, for 800 rupees each share. Moreover, an open bid will have to be made by Oracle for 20 percent shares of i-flex, in accordance to specifications of the Indian law.

Tuesday’s trading saw shares at i-flex soar 67.10 rupees above the price offered, to 897 rupees. This implied investors’ expectations for the buyer to increase the offer. However, Phillips stated that Oracle’s present offer was the final one and the deal would have no more alterations.

Regarding the management, i-flex’s existing team will continue holding the reins of the company and Oracle’s co-president, Phillips will enter the board. Trading of i-flex’s stock on the Bombay Stock Exchange and the National Stock Exchange of India will operate as usual.

i-flex has its head office situated in the financial capital of India, Mumbai and recruits more than 5,500 staff globally. Deutsche Bank, Citigroup and UBS are part of its impressive clientele. As for Oracle, it has about 8,000 developers based in India and continues to supplement further 250 to 300 people per month.


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