Oracle Corp. and BEA Systems

On October 12, 2007, Oracle Corporation, a software provider, made a buy out bid to BEA Systems, a leading provider of application software for computer servers, for $6.75 billion which was rejected by BEA Systems. The latest buzz is that BEA Systems has agreed to be bought by Oracle for $8.5 billion. The new price is about a 25% increase from the price in October 2007.

Is buying BEA Systems a smart strategy by Oracle? Answering the question depends on the reasons for why Oracle is buying BEA – is it for the customers, the technology, the management team? In the end, whether it was a smart move depends on the success of the integration of the two companies.

What kind of due diligence and research must be done before buying out a company? The due diligence that should be done before buying a company is to review its assets and liabilities. If technology is key in the buy strategy, due diligence includes looking to see if the technology really belongs to BEA because it does not, Oracle may be buying a lawsuit or a need to license technology from another company. Sometimes an acquisition may not be the best strategy if a company can partner with another company to obtain the same results.

Why do companies buy other companies? The question is difficult to answer, and may not be something that can be answered. There may be many explanations to do something, and sometimes coming up with the explanations create confusion. Explanations also create expectations. Letting go of the reasons and may be the inner confidence that is needed in order to be flexible, and not be controlled by a need to know the future.

» Related News Stories from Connecting News, Commentaries and Blogs at NineReports.com
Oracle to Acquire BEA Systems ...Blogged about at Oracle Corp. and BEA Systems - companycounselor, Oracle Corporation and BEA Systems have announced a definitive agreement under which Oracle will acquire all outstanding shares of BEA for $19.375 per sh... [Read More]

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