Oracle seals Siebel deal for $5.85 billion |
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Tue, 13 Sep 2005 09:05
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PHILADELPHIA - Oracle Corp has announced on Monday that it is buying San Mateo, California-based Siebel Systems in a deal worth $5.85 billion in cash and stock.
This deal is another in a string of takeover deals stuck by Oracle this year, the most notable one being the PeopleSoft acquisition. Thomas Siebel, chairman of Siebel Systems elaborated on the deal by saying, "What really brought this together is a shift in market dynamics we've seen occur over past three, four or five years. They had wanted best in class applications. Now the customer and partner community is communicating quite clearly and voting with dollars that what they want are integrated applications."
Oracle is paying $10.66 per share for Siebel, this is almost 16.8 percent more than what the company was valued at closing time on Friday. This can either be cashed in by Siebel shareholders or converted into Oracle shares of corresponding value. "Siebel's 4,000 applications customers and 3.4 million CRM users strengthen our number one position in applications in North America and move us closer to the number one position in applications globally," enthused Larry Ellison, Oracle chief executive. He added that this acquisition had made Oracle the leading [customer relationship management] company in the world. Redwood City, California-based Oracle has been looking to integrate as many applications as possible under a single group since its own applications are facing the threat of competition.
This deal with Siebel has been in the works for a long time and rumors had already surfaced that Oracle was ready to bid higher. In the immediate aftermath of this announcement of a done deal, Oracle shares fell, but were on the up by 30 cents thereafter. Siebel shares rose by 13 percent to $10.32 in early trading on the Nasdaq.
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