SAP to Acquire Business Objects in Friendly Takeover; Combined Companies to Accelerate Leadership for Business User Applications |
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SAP AG
Dietmar-Hopp-Allee 16
Walldorf, Germany
Press release date: October 7, 2007
SAP and Business Objects to offer the industry's most comprehensive portfolio of business performance and optimization solutions for Business Users for companies of all sizes
WALLDORF, Germany and PARIS, Oct. 7 / -- SAP AG (NYSE:SAP) and Business Objects S.A. (NASDAQ:BOBJ) (Euronext Paris ISIN code: FR0004026250 - BOB) today announced that the companies have reached an agreement that will bring together two of the information technology industry's leaders, resulting in an unmatched offering for Business Users, enabling timely and accurate decision-making. Under the terms and conditions of the tender offer agreement, SAP will make a cash offer of euro 42.00 per ordinary share and for American Depositary Shares (ADS) at the US$ equivalent based on the EUR/US$ exchange rate as of the settlement of the tender offers. The transaction volume taking into account the transaction costs will be slightly above euro 4.8 billion. The Business Objects board of directors has approved the tender offer agreement between the two companies and anticipates recommending the offer to its shareholders subject to fulfillment of certain regulatory requirements.
Together, SAP and Business Objects intend to offer high-value solutions for process- and business-oriented professionals. The solutions will be designed to enable companies to strengthen decision processes, increase customer value and create sustainable competitive advantage through real-time, multi-dimensional business intelligence. SAP and Business Objects believe that customers will gain significant business benefits through the combination of new, innovative offerings of enterprise-wide business intelligence solutions along with embedded analytics in transactional applications. Additionally, the joint partner ecosystems will be fueled by the industry's most powerful business process platform providing customers with the best enterprise information management platform available for SAP and non-SAP environments.
SAP is the world's leading provider of business software with more than 41,200 customers in more than 120 countries running SAP applications-from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. A key component of SAP's growth strategy is to significantly increase its revenues from new products including addressing the growing demands of Business Users.
"We are highly committed to the next generation of applications serving Business Users," said Henning Kagermann, CEO of SAP AG. "The combination of SAP and Business Objects in their respective domains will benefit customers, prospects, partners, employees and shareholders. At SAP, we are excited about the prospect of having Business Objects join the SAP Group."
"The acquisition of Business Objects is in keeping with SAP's stated strategy to double our addressable market by 2010 as announced in 2005," said Kagermann. "SAP will accelerate its growth in the Business User segment, while complementing the company's successful organic growth strategy. With the delivery of the first business process platform; the rapid adoption of our enterprise SOA platform, SAP NetWeaver; and the successful launch of the first complete on-demand business solution for midsized companies, SAP Business ByDesign, SAP can now take the opportunity to focus on the industry's next high-growth opportunity, by accelerating and enhancing our efforts for the Business User category," Kagermann, said.
Headquartered in Paris, France Business Objects is widely recognized as the pioneer of the business intelligence (BI) software category. Today, Business Objects is the world's leading BI software company with solutions spanning the information discovery and delivery, information management, analysis and performance management categories for more than 44,000 customers around the globe.
"Business Objects helps companies transform the way they work through the use of intelligent information," said Bernard Liautaud, Chairman and Founder of Business Objects. "The combination of Business Objects and SAP means that we can truly amplify the reach of Business Intelligence -- from the C-suite to Main Street. John Schwarz and I are excited to see the innovation and hard work of our employees and partners validated and soon extended by the portfolio, domain expertise and presence of SAP."
Transaction expected to be accretive to SAP's earnings per share on a U.S. GAAP basis in 2009 and beyond
SAP and Business Objects plan to exploit additional revenue opportunities and leverage potential synergies. Additional details regarding specific product, go-to-market and other executional details will be provided after the transaction is complete. Neither company intends to undertake significant restructuring as a result of the transaction.
The closing of the transaction is expected within the first quarter of 2008. On that basis SAP expects the transaction to be accretive to SAP's earnings per share on a U.S. GAAP basis in 2009 and beyond; however, due to acquisition-related one-time effects in 2008 SAP expects the transaction to be dilutive by mid single digits euro cents to SAP's 2008 earnings per share on a U.S. GAAP basis.
Business Objects to Operate Stand-Alone; Companies to Share Executives, Resources
The two companies announced that Business Objects will operate as a stand- alone business as part of the SAP Group. Business Objects customers will continue to benefit from open, broad and integrated business intelligence solutions -- independent of databases and applications - while also gaining the advantage of application alignment for business analytics. Business Objects will significantly enhance its Business Intelligence portfolio scope and capacity with SAP people, know-how and networks.
SAP said that the expertise and solutions from Business Objects would be complimentary to offerings SAP already provides for Business Users -- including, for example, category leadership in Governance, Risk and Compliance; business intelligence in the SAP platform; as well as corporate performance management capabilities - including those recently added through tuck-in acquisitions from OutlookSoft and Pilot Software.
When the transaction is complete, John Schwarz will continue as the CEO of the Business Objects entity and is expected to become a member of the SAP Executive Board. Doug Merritt, Corporate Officer, Business User, SAP, will then join the Business Objects entity and report to John Schwarz. Subject to the closing, SAP's Supervisory Board intends to propose to elect Business Object founder Bernard Liautaud to the SAP Supervisory board at the company's next shareholders meeting. Until that time, Liautaud will have an advisory role to Henning Kagermann on aspects of strategy and integration.
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