SAP AG, the largest maker of enterprise software, agreed to buy Ariba Inc., an online-trading platform for businesses, for $4.3 billion in the German company’s biggest push into cloud computing.
SAP will pay $45 a share for Ariba, Walldorf, Germany-based SAP said in a statement today. That’s 20 percent more than Ariba’s closing price yesterday. The transaction will probably be completed in the third quarter, subject to approval by Ariba shareholders and regulators. Ariba jumped 19 percent to $44.87 at the close in New York.
Ariba is the leader in cloud-based collaborative commerce applications and the second-largest cloud vendor by revenue, SAP said. As the battle for on-demand software intensifies, SAP has stepped up the pace of acquisitions to take on archrival Oracle Corp. SAP has shifted to offer many of its staple applications via the Internet to challenge Oracle, which has also been making purchases to bulk up its offerings in the cloud.
"There’s potential for other bidders to emerge," said Richard Williams, an analyst at Cross Research in Livingston, New Jersey, who has a hold rating on SAP. "There’s a history of bidding wars between SAP and Oracle and this is exactly the kind of strategic company that would spark something like that."
Deborah Hellinger, a spokeswoman for Oracle, didn’t immediately return a phone call seeking comment.
SAP’s acquisition of Ariba would be the largest enterprise software deal since Hewlett-Packard Co. bought Autonomy Corp. for more than $10 billion last year, according to data compiled by Bloomberg. There have been almost 1,200 of those transactions globally over the past decade, with a value topping $80 billion.
Ariba’s global trading network connects and automates more than $319 billion in commercial transactions, collaborations, and intelligence among more than 730,000 companies, according to SAP’s statement. SAP’s tools mostly serve internal business processes, and Sunnyvale, California-based Ariba would give the German company a way to automate business transactions with outside companies and make them a stronger competitor in cloud- based business networks, Williams said.
The deal will add to SAP’s profit, excluding some items, in 2013, Chief Financial Officer Werner Brandt said on a conference call. JPMorgan Chase & Co. and Deutsche Bank AG advised SAP on the sale, while Morgan Stanley provided financial counsel to Ariba.