Oracle Acquires BEA for $7.2 Billion

• By Becky Nagel
• 01/17/08

Oracle Corp. and BEA Systems announced Wednesday that they have completed a deal whereby Oracle will acquire BEA for $7.2 billion, or $19.375 per share.

Oracle originally offered to buy BEA in October for $6.7 billion, or $17 per share. BEA countered with a $21 per share price. Now that the companies have found a middle ground, the acquisition is going forward.

With BEA's cash on hand, the total deal is worth $8.5 billion, the companies said.

"This transaction is the culmination of that diligent and thoughtful process, and we believe it is in the best interests of our shareholders," Alfred Chuang, BEA's chairman and CEO, said in a printed statement announcing the deal. "We look forward to working with Oracle toward a successful completion of the transaction."

"Our joint customers have consistently suggested this deal for more than three years," said Oracle President Charles Phillips in the same statement. "This transaction will accelerate the adoption of Java-based middleware technologies and SOA [and] advance innovation in enterprise applications infrastructure software."

According to Forrester Research Senior Analyst James Kobielus, enterprise service oriented architecture (SOA) will be the big winner in this transaction. He explained in an interview today that the current SOA market is consolidating into "SOA masterbrands," and the combination of Oracle and BEA will ensure its position as a major player.

"BI is the crown jewel of SOA," he said. "BEA doesn't have much [in the way of] BI" -- but, if you add Oracle's own branded BI products plus Hyperion and Seibold, "it's a perfect fit."

That's just one example: "If you actually match up the vendors in their strengths and weaknesses in SOA, there's more that's complementary than meets the eye."

The acquisition may also help Oracle finally step fully into the .NET arena -- if it wants to -- according to Forrester Senior Vice President Merv Adrian. "BEA has a lot to bring to the [.NET] party," he commented. "Whether or not [Oracle] chooses to treat this as an opportunity to open the door for interop or whether it chooses not to will be one of the most interesting things to watch for in the upcoming months."

While Forrester's analysts may be bullish on this deal, others in the market think that it may not turn out so sweet. Dave Rosenberg, CEO of MuleSource, an open source company competing with Oracle and BEA in the SOA space, said in a statement e-mailed to reporters today that the merger will be an opportunity for companies like his. "It's great news for anyone who competes with BEA," he said. "The company has not had its eye on the ball for months now, and the fact that the software will be swallowed up by the Oracle machine means there is a very real opportunity with their customer base."