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SAP to buy Sybase for $5.8 billion

SAP to buy Sybase to leverage mobility expertise and deliver new database technology to market

SAP will use Sybase technology to take its applications to mobile users.
SAP will use Sybase technology to take its applications to mobile users.

SAP has announced its intention to buy database and business software company Sybase, for $5.8 billion.

The deal, which has been approved by the Sybase board, will see SAP bid $65 per share for outstanding stock in the company, with the deal expected to close in Q3. SAP will finance the deal with a $3.5 billion loan facility and existing cash.

SAP stated that the main benefits of the deal will be in using Sybase mobility solutions to deliver SAP applications to mobile devices.

"With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world's best business software with the world's most powerful mobile infrastructure platform," said Bill McDermott, co-CEO of SAP and member of the SAP Executive Board.

"This is a game-changing transaction for SAP and Sybase customers, who will be better able to connect their employees with key functionality and information from anywhere and make it easier for companies to make faster, more informed business decisions in real time. With SAP's customer-centric approach, we are resolute in our commitment to support Sybase customers to be best-run businesses," he added.

The deal will see Sybase continue as a standalone business unit, retaining the Sybase name and the company's management. Product roadmaps for both companies will continue as planned, and both companies' development teams will remain intact.

Sybase has a portfolio of access, management, development and security tools as well as a variety of mobile messaging service, focused on the enterprise. SAP says that it will use this portfolio to extend the reach of its applications, driving further adoption of SAP applications and adding value to existing users. Sybase mobile platform is also able to deliver a range of other business applications to mobile devices, and its messaging network connects to four billion mobile subscribers through over 850 operator relationships worldwide.

Sybase also brings greater expertise in analytic, primarily for the financial sector, which can be extended to SAP applications.

The deal will also give Sybase access to SAP's in-memory database technology, which uses main memory for computer data storage rather than disk storage mechanism, for faster performance, to enhance Sybase's core database business.

"This combination is a transformative event in the software industry," said John Chen, CEO of Sybase. "SAP's in-memory technology in combination with Sybase's database technology will revolutionize how transactional and analytic applications are built, benefiting all businesses. Further, by combining the market leader in enterprise applications with the market leader in enterprise mobility, companies around the world will be able to run their business from many devices. This will drive a new wave of enterprise productivity. The combined SAP/Sybase will be able to provide a software offering that enables companies to transform their businesses in an increasingly data-, consumer- and mobile-centric world."

Analyst response to the deal was broadly positive, with most seeing good synergies in the technologies held by both companies, with SAP benefiting from going mobile while Sybase improves core databases and helps SAP bring in-memory database technology to market.