Oracle Aims to Acquire BEA Systems - Finally

Oracle has finally put a move on BEA Systems. Oracle announced Oct. 12 that it delivered a letter to BEAs Board of Directors on Oct. 9 proposing to acquire BEA for $17 per share—a 25 percent premium over Oct. 11s closing price of $13.62.

For months—years even—its been rumored that Oracle would acquire BEA in order to add to its middleware portfolio. BEAs Aqualogic suite provides a platform that Oracle could use to glue the disparate pieces of its growing suite of applications, making it easier for customers to build SOAs [service oriented architectures].

On Oct. 12 the rumor was finally confirmed.

Oracle also made sure to reassure BEA customers that it intends to protect their investment in BEAs software by supporting them—and the products theyve already bought—for years to come.

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"Our continuing support has been amply demonstrated with all of our previous acquisitions, including PeopleSoft and Siebel. BEA will be no different," said Oracle President Charles Phillips in a statement.

Oracle began a massive acquisition spree in 2005 with the hostile takeover of PeopleSoft; since then, it has acquired 35 companies, the latest of which was LogicalApps, on Oct. 9.

Click here to read more about Oracles acquisition of LogicalApps.

At the time that Oracle was in the process of acquiring PeopleSoft, Oracle officials intimated that they would end support for the companys software—a move that resulted in a huge customer outcry. Oracle smartly reversed its tactic, announcing after the acquisition of PeopleSoft, and by default JD Edwards, that it would offer unlimited support for both companies applications. The move put many customers, ready to jump ship to another vendor, at ease.

Philips emphasized that the acquisition of BEA will help Oracle put in place its Fusion strategy and provide customers with a better platform for implementing a Web services-based infrastructure.

The deal, said Philips, will "accelerate the development of our world-class suite of middleware. Both Oracle and BEA customers will benefit from this increase in engineering investment as they migrate to modern SOA technologies."

From all appearances, the deal should be concluded swiftly without acrimony. "We have made a serious proposal including a substantial premium for BEA," said Phillips. "We believe our all-cash offer provides the best value for BEAs shareholders and the best home for BEAs employees and customers. This proposal is the culmination of repeated conversations with BEAs management over the last several years. We look forward to completing a friendly transaction as soon as possible."

The letter of intent, however, is just that. Neither company has entered into a formal agreement as of yet.

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