Oracle-PeopleSoft battle to drag on in US and Europe

13 Nov 2003

Oracle’s US$7.25bn bid for rival software maker PeopleSoft looks like it will take longer than expected to complete as the antitrust investigation process in the US and Europe seems likely to continue, a top Oracle executive has admitted.

In an interview with a US news site, Oracle executive vice-president Chuck Philips said the company hoped to have got through the US antitrust hearings this month but the noises from the US Justice Department suggest a verdict won’t be forthcoming until December or January.

The news from Europe, meanwhile, is similarly unhelpful for the world’s second largest business software maker after SAP. The European Commission, which began its review of the deal last month, is expected to announce next Monday either its verdict or a decision to enter a more detailed second phase of investigations. Philips conceded it was unlikely that the Commission would jump ahead of US antitrust proceedings and therefore expected the EU’s antitrust watchdog to announce a second phase, which could last up to four months.

Both the US Justice Department and the European Commission are likely to base their investigations on the question of whether or not the merger would reduce competition in the marketplace and push up prices for business customers. If the consensus is that it would, the merger would likely be blocked in one or both jurisdictions.

At Oracle World in Paris last month, Philips played down suggestions that Oracle’s bid was getting bogged down, saying it was “only a matter of time” before the bid succeeded.

“We are optimistic. We have a good case and believe that our acquisition of PeopleSoft will improve conditions in the business. The hardest thing we face in the entire thing is regulatory approval. The transaction is not dead.”

By Brian Skelly