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Summary:

Oracle (ORCL) continues on its enterprise software roll-up strategy. Having already gobbled up dozens of companies including PeopleSoft, it now has plans to buy BEA Systems (BEAS), offering $17 a share, or about $6.7 billion. Oracle offer is 25 percent higher than BEA’s recent closing price. […]

Oracle (ORCL) continues on its enterprise software roll-up strategy. Having already gobbled up dozens of companies including PeopleSoft, it now has plans to buy BEA Systems (BEAS), offering $17 a share, or about $6.7 billion. Oracle offer is 25 percent higher than BEA’s recent closing price. Update: BEA, however, says that’s not good enough.

BEA has been under pressure lately from Carl Icahn, a corporate raider-turned-white knight. Icahn recently campaigned for management changes at Motorola (MOT) and Time Warner (TWX). He has 13% stake in BEA, which according to Dealbook cost him $663 million. That’s worth $871 million, if Oracle gets its way. Or a whopping $208 million in profit for Icahn in less than a month. Now that’s a good life!

Stuart Williams, Senior Analyst, with Technology Business Research gives a thumbs up to the deal:

BEA is a technology-focused firm that should find a good home inside Oracle. Oracle owns the software stack below the BEA middleware (OS and database), around BEA’s offerings (the complete Oracle Fusion Middleware suite), and above BEA’s offerings (applications). Oracle can integrate the BEA technology directly into the core of the Oracle stack, strengthening it, while at the same time removing a competitor and adding close to $1.4 billion in annual revenue to its coffers. TBR believes the potential acquisition is a strong win for Oracle. BEA will help Oracle as the company gears up to combat IBM for the leadership position in the middleware market.

  1. This will be another big step for the success of Oracle Fusion. Oracle Fusion is build from the best of all product and almost compatible with any technology.So moving forward existing customer of BEA can gain Oracle Technology expertise and ofcourse BEA will add to Oracle Fusion quality. Paying Higher for BEA worth for Oracle long term strategy.

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  2. Amit Srivastava Friday, October 12, 2007

    Question is, why is SAP sitting on the fences and not acquring BEA. It seemed to me that it was a better marriage with SAP.

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  3. I agree with previous comment.
    I don’t see what Oracle will get from that except the client base…
    BEA is struggling with its integration suite while Oracle is more advanced….
    Strange move…

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  4. [...] Oracle to buy BEA Systems « GigaOM BEA will help Oracle as the company gears up to combat IBM for the leadership position in the middleware market. (tags: bea oracle enterprise platform) Posted by zeroinfluencer Filed in del.icio.us links [...]

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  5. [...] Oracle making an aggressive play for enterprise software vendor BEA, Cisco now risks becoming an enterpise also-ran. CEO John Chambers has long championed the idea of [...]

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  6. [...] by Om Malik Monday, October 15, 2007 at 3:30 AM PT | No comments Oracle’s (ORCL) unsolicited $6.67 billion bid for BEA Systems (BEAS), deemed not enough by the prey, is a sign that the era of mid-sized software [...]

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  7. [...] (or taking over) someone smaller. Just look at SAP’s recent acquisition of Business Objects, Oracle’s bid for BEA Systems or the constant interest in Facebook by heavy hitters Yahoo!, Google, and Microsoft. Google alone [...]

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  8. [...] (BEAS) and Oracle (ORCL) got into an intense game of chicken back in October, starting with a $17-per-share offer from Oracle. BEA scoffed at the price, asking instead for $21 per share. Oracle CEO Larry Ellison [...]

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