SAP Announce Agreed Take-Over of Ariba!

I've been at the  SAP London Forum all day today and they didn't give any hint of this!  SAP have just announced an agreed purchase of Ariba for $45 a share, valuing Ariba at $4.3 billion.

"The Ariba board of directors has unanimously approved the transaction. The per share purchase price represents a 20% premium over the May 21 closing price....The transaction will be funded from SAP's free cash and a EUR 2.4 billion term loan facility. The transaction is expected to close in the third quarter of calendar year 2012, subject to Ariba stockholder approval..... The transaction is expected to be accretive to SAP's non-IFRS earnings per share in 2013".

We - well Jason Busch at Spend Matters US in particular - predicted that this year would see some major consolidation in the procurement technology market, but I'm not sure we saw quite this combination coming so soon.

At the SAP event today, it was interesting to see how closely IBM were positioning themsleves to SAP - interesting because of course IBM acquired Emptoris at the end of 2011, taking them very firmly into the procurement technology world and up against SAP in more instances. So I wonder whether that may have stimulated SAP to think harder about competitive responses to that.

But what seems slightly ironic is that all the signs recently have been that SAP was at last innovating and coming up with some very attractive new products - like InfoNet. However, Ariba's strength in the network area may be what really attracts SAP, along with some solid capability and customer base elsewhere.

Anyway, Jason will I'm sure be commenting a lot more in the next day or two so do follow him, and of course we'll come back to the news as well.

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Voices (2)

  1. Viral:

    How this is going to affect/help other spend management company?
    will this boost ariba’s competitor revenue or vice versa?

  2. Stephen Matthews:

    I think it is an earlier response than expected by SAP and probably propted by IBM’s take over of Emptoris last year but this will help corporates who have mixed landscapes of SAP and Ariba in their roadmap and integration planning of there procurement systems.

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