(October 9, 2007) - Just as SYS-CON.com speculated it might back in mid-September, SAP has agreed to buy Business Objects. The price paid net of cash acquired will be $6.8BN. CEO John G. Schwarz is to be kept on, and SAP says it's going to keep the Business Objects brand and let the company operate as a standalone entity.

The acquisition is a clear reponse to Oracle's having bought Business Objects competitor Hyperion.  Business Objects'  applications - which include data integration, performance management, query and analysis, and reporting functions - are used to measure profitability, determine marketing and sales effectiveness, automate human resources functions, and analyze customers and vendors.

It was over three weeks ago that we were able to bring a report that French-American software group Business Objects was in play and had commissioned Goldman Sachs to find a suitor.

“We are highly committed to the next generation of applications serving Business Users,” said Henning Kagermann, CEO of SAP AG, as the news was announced this weekend. “The combination of SAP and Business Objects in their respective domains will benefit customers, prospects, partners, employees and shareholders. At SAP, we are excited about the prospect of having Business Objects join the SAP Group,” he added.

“The acquisition of Business Objects is in keeping with SAP’s stated strategy to double our addressable market by 2010 as announced in 2005,” said Kagermann. “SAP will accelerate its growth in the Business User segment, while complementing the company’s successful organic growth strategy. With the delivery of the first business process platform; the rapid adoption of our enterprise SOA platform, SAP NetWeaver; and the successful launch of the first complete on-demand business solution for midsized companies, SAP Business ByDesign, SAP can now take the opportunity to focus on the industry’s next high-growth opportunity, by accelerating and enhancing our efforts for the Business User category,” Kagermann continued.

The Business Objects board of directors has approved the tender offer agreement between the two companies and anticipates recommending the offer to its shareholders subject to fulfillment of certain regulatory requirements.

As the San Jose Business Journal noted yesterday, "The deal marks a shift in strategy for the SAP, which until now has shunned major deals like this while its Redwood City-based competitor Oracle Corp. has bought up a number of companies."