Oracle's $7.85 B buyout of BEA clears last regulatory hurdle

Software giant Oracle Corp., today won approval for its $7.85 billion buyout of middleware specialist BEA Systems from the European Commission, removing the only remaining obstacle in the antitrust space to completion of the deal.

While initially reluctant to merge with Oracle, BEA got swayed into changing its mind in mid-January after Oracle raised its buying price.

Oracle -- the world's third largest software vendor -- and BEA announced in February that they had obtained approval for the merger from US regulatory agencies.

In a statement today, EC officials said they had examined the potential effects of the proposed deal on both the overall middleware sector, and its "sub-divisions," such as application servers, portals, enterprise service bus software, and application integration software.

"In each instance, the Commission found that the horizontal overlap between the parties' activities would not give rise to competition concerns, in particular since Oracle and BEA were not seen to compete head to head," according to the statement. "The combined Oracle and BEA entity would face several strong competitors in the overall middleware market and in each of the sub-segments, such as IBM, Sun, Microsoft and SAP, and customers would therefore find sufficient alternative suppliers."

Oracle has been widely viewed as benefiting from the merger by gaining BEA's middleware, along with a large customer base that will boost its stature in both the database and enterprise resource planning (ERP) arenas.

But the acquisition will also be good for BEA, according to some analysts. Under Oracle's Wing, BEA will no longer stand alone against "powerful masterbrands such as SAP and Microsoft," said James Kobelius, senior analyst for data warehousing at Forrester Research, in an earlier interview with BetaNews.

With today's announcement, the EC met an April 30 deadline for approving the merger between Oracle and BEA.