NEW YORK (AFP) - US business software giant Oracle clinched a deal Wednesday to take over rival BEA Systems for 8.5 billion dollars after a long battle over the price tag.
The deal strengthens the position of the company led by billionaire Larry Ellison, which is in a fierce battle with Germanys SAP in the growing market for software to help companies manage a variety of tasks such as sales and inventory.
BEA had rebuffed a prior takeover offer from Oracle last year valued at 6.68 billion dollars, claiming it undervalued BEA, leading to a months-long stalemate.
The two technology firms hope to close the deal by mid-2008 depending on regulatory and shareholder approvals, according to a joint statement.
Ellison, Oracles founder and one of the worlds richest people, said the takeover would significantly boost the California-based firms software capabilities and enhance Oracles earnings.
"The addition of BEA products and technology will significantly enhance and extend Oracles Fusion middleware software suite," said Ellison, adding that the products "will gracefully interoperate and be supported for years to come."
Oracles takeover values BEA, which is also headquartered in California, at 19.37 dollars per share compared with its prior bid of 17.00 dollars.
Activist billionaire investor Carl Icahn, who holds a 13 percent stake in BEA, had been pressing BEA to accept a takeover. He issued a statement on the heels of Wednesdays announcement by the companies saying he fully backed the deal.
"This transaction is an excellent example of the great results that can be achieved for all constituencies when the shareholder activist is able to work cooperatively with management," Icahn said.
Alfred Chuang, BEAs chairman and CEO, said the deal would maximize stockholder value.
"This transaction is the culmination of that diligent and thoughtful process, and we believe it is in the best interests of our shareholders," he said.
"I am confident our innovative products, talented employees and worldwide customer base will be key contributors to the success of the combined company over the long term. We look forward to working with Oracle toward a successful completion of the transaction."
Oracle shares fell 4.5 percent to 21.21 dollars after the announcement and BEA surged 19 percent to 18.55.
Oracle, the worlds second-largest software group, is in a pitched battle against German rival SAP.
The US firm outmaneuvered SAP in 2004 to buy rival firm PeopleSoft and then outbid the German group a year later for another software maker, Retek.
Oracle has sued SAP alleging it looted Oracles software libraries to gain a competitive advantage. A trial is set for 2009 in California.
The German group, which claims to be the largest maker of business software, last year acquired Business Objects for 4.8 billion euros, adding the companys specialist business intelligence software to SAPs broader range of offers.
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