Oracle to close PeopleSoft acquisition today

It's moving quickly to merge the two companies' operations

Oracle Corp. expects to close its $10.3 billion acquisition of PeopleSoft Inc. today and said it is moving quickly to merge the two companies' operations.

PeopleSoft's shareholders had agreed to sell more than 97% of the company's outstanding stock, or about 388.7 million shares, by the time Oracle's latest tender offer closed at 8 p.m. Eastern time yesterday, Oracle said in a statement. Oracle had already secured enough stock to give it control of PeopleSoft but needed at least 90% to bring the deal to a rapid close.

The merger will make Oracle the world's second-largest seller of business applications software behind Germany's SAP AG. Oracle has said it needs the acquisition to give it the size and heft it requires to compete effectively in the applications market.

Launched 18 months ago, the hostile takeover bid was initially rejected by PeopleSoft's management and opposed by U.S. antitrust regulators, who said it would harm competition and lead to higher prices. A California judge rejected that argument in September, and Oracle announced on Dec. 13 that PeopleSoft had agreed to be acquired for $26.50 per share.

Oracle has said it will release an upgrade to PeopleSoft's main product lines but plans to eventually build a single product suite that merges what it sees as the best features and modules of the two companies' products.

When the merger is complete, Pleasanton, Calif.-based PeopleSoft will become a wholly owned subsidiary of Oracle.

Oracle has set Jan. 14 as the date for notifying employees who will be laid off as a result of the deal, and it plans to explain its plans for the merged company in a webcast for customers and partners on Jan. 18.

Copyright © 2005 IDG Communications, Inc.

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