SAP announced Sunday afternoon it plans to acquire Business Objects in a cash deal valued at slightly more than US$6.8 billion.
The acquisition, which is expected to close in the first quarter of 2008, is SAP's largest acquisition ever. The deal is especially noteworthy for SAP, which has tended to favor developing its own technology, rather than acquiring it.
The acquisition of Business Objects, a leading player in business intelligence software, is designed to dovetail into SAP's previously announced strategic plans to double its addressable market by 2010, said Henning Kagermann, SAP chief executive, during a press conference Sunday afternoon.
Nearly a year ago, SAP noted the business intelligence market was growing at a rapid rate. And SAP's customers had been calling on the enterprise applications giant to add an end-to-end solution for structured and unstructured business analytics and embed them into SAP's business suite, Kagermann noted.
"This acquisition accelerates our growth potential," Kagermann said.
Forrester Research estimates that the business performance solutions market will grow by 11 percent through 2010.
Business Objects, based in San Jose, Calif., and Paris, will operate as a stand-alone business and be part of the SAP Group.
Roughly 40 percent of Business Objects' customers use SAP, said John Schwarz, Business Objects chief executive.
The companies said there is very little overlap and neither company expects significant restructuring as a result.
With the Business Objects acquisition, SAP will be further positioned to compete against its arch-rival Oracle. Last March, Oracle acquired business intelligence tool developer Hyperion Solutions in a US$3.3 billion deal.
At the time of the Hyperion acquisition, Oracle touted that "thousands of SAP customers" relied on Hyperion for such things as financial analysis and reporting system of record. And that with its acquisition, SAP's customers would need to tie into Oracle's Hyperion software to view and analyze their underlying SAP enterprise resource planning (ERP) data.
Business Objects' Schwarz, however, noted that his company is roughly three times the size of Hyperion.
This article was originally a blog post on News.com.
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