SAP buys Sybase for US$5.8B Tweet

Germany's SAP is to buy business software maker Sybase for US$5.8 billion in a move that will significantly ramp up its presence in the smartphone space, reports Reuters. California-based Sybase has technology designed to deliver business applications to smartphones and other mobile devices. It is also the fourth-largest maker of database software after Oracle, IBM and Microsoft. "We want to make sure SAP solutions can be accessed from all leading mobile devices. The acquisition of Sybase will allow us and our partners to do just that," SAP's co-CEO Jim Hagemann Snabe said on a conference call. SAP has agreed to pay US$65 per share in cash for Sybase, which represents a 56 percent premium to Sybase's Tuesday closing price on the New York Stock Exchange. The acquisition – due to close in the third quarter - would be the second-largest in SAP's nearly 40-year history.

Reuters notes that Sybase's most valuable asset is its mobile software because it will give SAP an edge over Oracle when it comes to allowing customers to use business management software on the go. Those products accounted for about 27 percent of Sybase's US$403 million in software sales last year with the rest coming from databases. “This acquisition has dramatically altered the mobile enterprise solutions market, and we see this as a win-win for both SAP and Sybase,” said Jack Gold of J.Gold Associates in a research note. “Mobility is an area where SAP has tried to be a major player on its own for some time, but has largely failed and has needed to rely on third party solutions to remain competitive.” He described the deal as a “direct assault at Oracle,” which he says has had a “a weak mobile story” to date.

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