14 September 2005

The Web

Oracle agrees to buy Siebel for USD10.66 a share

Oracle Corporation (Nasdaq: ORCL) announced that it agreed to buy Siebel Systems, Inc (Nasdaq: SEBL) for $10.66 per share. The offer is valued at approximately $5.85 billion, or $3.61 billion net of Siebel's cash on hand of $2.24 billion.
"In a single step, Oracle becomes the number one CRM applications company in the world," said CEO Larry Ellison. "Siebel's 4,000 applications customers and 3,400,000 CRM users strengthen our number one position in applications in North America and move us closer to the number one position in applications globally."
"Today is a great day for Siebel Systems' customers, partners, shareholders, and employees," said Thomas M. Siebel, Chairman of Siebel Systems. "The combination of Siebel applications with the development capacity of Oracle to enhance our CRM product set assures our customers continuing success. This is a very beneficial business combination that will allow us to be even more effective in delivering high quality, leading edge solutions into the hands of satisfied customers."
"This is a customer driven event. Our joint customers have consistently recommended this transaction to both companies for over a year," said Oracle President Charles Phillips. "We will embrace Siebel's best-in-class CRM products and make the features of those products the centerpiece of our Project Fusion CRM."
"We expect this transaction to be accretive to Oracle's earnings on a non-GAAP basis in its first full year (FY07)," said Oracle President and CFO Greg Maffei. "Longer term, Siebel will contribute to Oracle's stated goal of 20 percent annual earnings growth. Given the size of our existing R&D investment, scale of our global support infrastructure, and similarity of our back office requirements, we will recognize substantial efficiencies from combining our two businesses."
CRM applications capture and streamline all customer interactions so CRM users can better understand, service and anticipate their own customers' needs. Of all major segments of the enterprise applications business, CRM is the largest and fastest growing - estimated to be more than $8 billion in 2004 and expected to grow to $10 billion by 2009, according to IDC. Siebel's CRM and Oracle's enterprise applications and middleware share an architecture that embraces industry standards, and a significant majority of Siebel's implementations run on the Oracle database.
The Board of Directors of Siebel Systems has voted in favor of the transaction, and Tom Siebel has agreed to vote his shares in favor of the acquisition. Siebel stockholders will convene in a special meeting to vote on the acquisition. Oracle stockholder approval is not required. While the transaction and the timing are subject to regulatory approvals, the deal is expected to close in early 2006.
Siebel shareholders will receive $10.66 per share in cash for each Siebel share held, unless they elect to receive Oracle common stock, but no more than 30% of Siebel's common shares may be exchanged for Oracle common stock. In the event that Siebel shareholders holding more than 30% of Siebel common stock elect to receive Oracle common stock, the equity consideration will be pro-rated.
The measurement period for Oracle's average share price will be the ten trading days ending the day prior to close, and Oracle will have the right to choose an election date during the twenty trading days ending two days prior to close. If Oracle's average share price is at or above $10.72 prior to close, Siebel shareholders who elect to receive stock will receive $10.66 per share of value in Oracle common stock for each share of Siebel common stock held. If Oracle's average share price prior to close is less than $10.72 per share, Siebel shareholders that elect to receive stock will receive 0.994 shares of Oracle common stock for each share of Siebel common stock held, which would result in a value of less than $10.66 per share.
Oracle intends to repurchase an amount of shares equal to the number of shares issued in the transaction.

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