Technology Wars – SAP gobbles up Sybase to counter Database Leader Oracle

Technology Wars have erupted between  Technology Titans as the Industry consolidates behind 5-10 Big Global players.One of the strategies in these wars is acquisition of small and mid sized companies ,recent example is HP buying Palm to make an entry into the smartphone segment. The Database/Business Software Market has been dominated by Oracle which has used a string of acquisitions to fortify its leadership position in this segment. .Oracle’s  acquisition strategy has been truly astounding in its success as it manage to gobble up small and big companies with ease and successfully integrate them . Its competitors in this technology market segment have been left far behind.Microsoft and IBM are bit players with  SAP the only pure play company in this space which has been trying to grow organically.However it seems SAP is changing tack to emulate its more successful competitor by buying up database company Sybase

SAP agrees to buy Sybase for $5.8 billion – MarketWatch

SAP AG said Wednesday it’s agreed to buy Dublin, Calif.-based Sybase Inc. for roughly $5.8 billion, as the German software giant seeks to revamp its culture and compete more effectively with acquisitive rival Oracle Corp.SAP said in a statement that it will make a tender offer for Sybase at $65 a share, a 44% premium over the shares’ thee-month average price. Sybase shares have historically never traded above $55 a share on a split-adjusted basis, a mark they reached in 1994.

In after-hours trading, Sybase shares rose 15% to $64.65, while U.S.-traded shares of SAP ) fell nearly 1% to $44.50.Shares of Sybase had surged earlier Wednesday, following a Bloomberg News report of the impending merger announcement.

SAP and Sybase said the deal will be made using SAP’s cash on hand, and a 2.75 billion euro ($3.47 billion) loan facility. Sybase will operate as a standalone unit, and its management team will remain in place.”This is huge,” SAP co-CEO Bill McDermott said during a conference call, adding that the merger is “about accelerating growth for both businesses.” With the acquisition, SAP is gaining mobile technology, and so-called “in-memory” database technology — raising questions about how SAP will position it in relation to Oracle’s database software.

While Sybase’s board has approved the merger, and the companies expect the deal to close in July, analysts say competing bids for Sybase could yet emerge.McDermott had said in March that as SAP is looking to overhaul operations, it could seek to make significant acquisitions.