SAP AG buys out SAP Arabia

ERP major buys out SAP Arabia to establish direct operations for the Middle East.

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By  Eliot Beer Published  September 11, 2007

SAP AG is to buy out SAP Arabia's exclusive distribution rights for the Middle East and North Africa, the company announced today.

The move will pave the way for the software major to establish its own direct presence in the region and to appoint new partners in the region. SAP also expects to expand head count locally.

The value of the all cash deal was not disclosed, but it is set for completion in Q4 2007.

Under the deal, SAP AG will acquire all of SAP Arabia's existing software licence and customer maintenance contracts, as well as SAP trademarks and other selected assets. SAP counts many large enterprises among its customers in the region, including Aramco, the largest single site ERP deployment in the world.

Sergio Maccotta, formerly in charge of SAP's relationship with SAP Arabia, will become managing director of the new operation, SAP Middle East and North Africa.

Ernie Gunst, president of customer solutions operations in EMEA for SAP, said the acquisition is part of the vendor's global customer strategy, and will open up new opportunities for SAP in the region.

"SAP Arabia has created a good foundation, which we intend to build upon in our goal to meet growing market demand in the region," he said. "This acquisition brings SAP closer to its customers and partners, enabling us to offer them greater business value and innovation."

Gunst said SAP and SAP Arabia will put a process in place to deal with the transfer of support contracts for existing customers over the next two months, to ensure there would be no disruption to customers.

The new deal puts an end to a relationship that SAP CEO Henning Kagermann had previously described as "less than perfect", but Gunst said the deal is about looking to the future, not the past.

"When you're in an exclusive relationship it's like a marriage - it has its good bits and its bad bits," he said.

SAP Arabia will continue trading under a different name, which was not disclosed, operating as a non-exclusive value added reseller partner for SAP.

Essam Enany, president of SAP Arabia said that he expects the new unit to become one of SAP's strongest partners in the region, with a particular focus on the SMB market.

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