After 18 months of haggling, legal battles, and bad press, database giant Oracle finally closed the deal to purchase rival PeopleSoft for $10.3 billion. PeopleSoft's board, which had resisted previous overtures from Oracle, finally agreed to the deal Monday when Oracle upped its previous proposal by 18 percent.
"Today we announced the agreement to acquire PeopleSoft," said Oracle CEO Larry Ellison. "This merger gives Oracle even more scale and momentum ... \[and\] works because we will have more customers, which increases our ability to invest more in applications development and support. We intend to enhance PeopleSoft 8 and develop a PeopleSoft 9 and enhance a JD Edwards 5 and develop a JD Edwards 6. We intend to immediately extend and improve support for existing JD Edwards and PeopleSoft customers worldwide."
The Oracle/PeopleSoft deal marks the end of one of the most cantankerous corporate mergers in PC history, with executives from both companies publicly joking and complaining about their rivals during virtually the entire process. Oracle's pursuit of PeopleSoft quickly devolved into a hostile takeover attempt after PeopleSoft quickly rejected Oracle's initial bid. And antitrust regulators in both the US and Europe investigated the proposed merger, with the US Department of Justice (DOJ) unsuccessfully trying to block the deal. In recent weeks, however, the PeopleSoft board began reaching out to Oracle, and after PeopleSoft allowed Oracle to investigate its finances for the first time, Oracle agreed to a larger price.
Already the world's largest seller of database products, Oracle will now become the world's largest seller of applications for human resources, accounting, and financial software, all of which run on top of databases. So the deal positions Oracle to better compete with chief rivals SAP, IBM, and Microsoft.