Ellison: Victory at last

New York, Dec. 13: The business software company Oracle Corporation announced today that it had signed a ?definitive merger agreement? to acquire its main American rival, PeopleSoft Inc, in a deal worth about $10.3 billion.

The company, based in Redwood City, California, increased its offer, after an 18-month battle to acquire PeopleSoft, to $26.50 a share, a month after insisting that $24 a share remained its ?best and final? bid.

?Today we announced both a great quarter and the agreement to acquire PeopleSoft,? Oracle?s chief executive, Larry Ellison, said in a statement posted on its Web site.

?This merger gives Oracle even more scale and momentum.?

?The real highlight of our most recent quarter was the 57 per cent growth in our applications business, and this merger is going to make that applications business bigger and stronger,? he added.

The bid was approved by the boards of directors of both companies, and is expected to close by early January.

The majority of PeopleSoft?s shareholders had accepted Oracle?s $24 a share, which valued the company at $8.8 billion.

But PeopleSoft, based in Pleasanton, California, released information on December 7 showing that its shares were worth $31 apiece, which it used to reject Oracle?s offer for the fifth time since 2003.

Oracle cleared the final regulatory hurdle to a takeover in October when the European Commission said the deal would not harm competition. For Oracle, PeopleSoft is expected to resuscitate an applications business that last quarter had a 36 per cent decline in license revenue. The acquisition will elevate number three-ranked Oracle to number two, behind SAP of Germany, the world?s biggest maker of business-management software.