SAP acquires Sybase for $6 billion

SAP co-CEO Bill McDermott
In a bid to compete with arch-rival Oracle, SAP has agreed to acquire business software maker, Sybase for $6 billion dollars. This deal is slightly less than SAP’s 1998 takeover of Business Objects for $6.8 billion.

In terms of the Sybase deal, SAP will pay $65 a share – marking a 56 percent premium to Tuesday’s closing price of $41.57 a share – for Sybase via a tender offer. In addition, SAP will also assume the $400 million debt of the company.

The SAP-Sybase deal is expected to close in the third quarter; after a majority of Sybase shareholders tender their shares to SAP.

The acquisition of Sybase – one of the significant moves coming after the February departure of SAP CEO Leo Apotheker, who was replaced by co-CEOs Bill McDermott and Jim Hagemann Snabe – will essentially indicate SAP’s foray into the database software arena, wherein its products will further overlap the products of its longtime competitor, Oracle.

While Sybase will operate as a stand-alone unit within SAP under its present management, the executives of SAP and Sybase revealed that they will chiefly focus on the development of an array of number processing software, largely dependent on Sybase’s strengths in inter-smartphone transportation of accounting software and other programs.