SAP has sought to allay investor fears about a new bidding rivalry between the German business software maker and US rival Oracle by pledging big acquisitions only to enter new markets rather than to consolidate existing ones.
Henning Kagermann, chief executive, said the offers by SAP for software maker Business Objects and that of Oracle for BEA Systems – both valued at €4.8bn – showed the two groups were still on different paths.
“We bought a company that complements our product line in a fast-growing market in which SAP is not market leader,” he told the Financial Times.
“We believe in complementary deals. We’re not interested in a classic consolidating of markets.”
Investors last week dumped SAP stock for fear the largest business software maker in the world had given up its goal of growing organically to ape Oracle, which has spent $31bn (€21.8bn) on rivals in recent years. The German group’s stock price lost 5 per cent after it announced by far its biggest acquisition to gain a leading position in the market for business analysis programmes, an “end-user” area in which SAP is weak.
But investor fears of a bidding war with Oracle ebbed on Friday when the US group announced an unsolicited bid for BEA Systems, a move to consolidate its position among makers of software to bundle disparate applications. Mr Kagermann said SAP was well positioned in the market for so-called service oriented architecture.
He was not considering a counter offer for BEA, or a bid for any other company in a market that had “so much overlap” with SAP.
He said this was consistent with SAP’s strategy of growing organically in its two core units that provide the software spine or “platform” for corporations, and address the needs of small and medium-sized companies.
But he repeated adverse investor reaction would not stop SAP from committing to more deals in the end-user market. “We’re categorically not excluding further big acquisitions,” he said.
Business Objects specialises in programmes that sift corporate data to help executives decide strategy. Mr Kagermann noted “that many analysts believe that there are still interesting opportunities in this sector”.
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