SAP’s NYSE stock fell 47 cents following the announcement and 35 cents in after-hours trade to close at $44.55.
SAP AG, the world’s biggest business software firm, is to buy California-based rival Sybase for $5.8 billion (€4.57 billion) in an effort to tackle the burgeoning mobile apps market and fend off Oracle.
The firm will pay $65 for each Sybase share - a 56% premium on Sybase’s Tuesday closing price - in cash, with the help of a €2.75 billion loan from European banks, the company announced.
The Sybase board has approved the takeover.
SAP said the merger would “accelerate the reach of its solutions across mobile platforms.” It gives SAP access to Sybase’s mobile platform, which can connect all applications and data on mobile devices
“With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world’s best business software with the world’s most powerful mobile infrastructure platform,” said SAP co-CEO Bill McDermott.
The merger will also enable SAP to challenge Oracle, which has claimed to be winning away its customers, Bloomberg said.
“The deal makes sense because SAP is betting heavily on in-memory computing and mobile applications as the future of computing and Sybase brings to the table a capability for high-speed in-memory databases and a mobile application platform,” Paul Hamerman, vice president of enterprise applications at Forrester Research, told Bloomberg.