The European Commission has launched an in-depth
investigation into Oracle's hostile $7.3bn bid to take over rival
software maker PeopleSoft.
The commission said that during the four-month probe it will
investigate the transaction's impact on the market for business
application software used by large multinational companies.
"The initial one-month investigation has shown that the
combination of two of the largest competitors in the market merits
further analysis especially as the number of key players would be
reduced from three to two - Oracle and SAP - in certain
applications software markets," the commission said.
Software that helps companies co-ordinate and plan their
financial and human resources and their relationship with customers
are among the sectors the commission will look at.
In June, Oracle launched a takeover bid for rival PeopleSoft. It
notified the commission about last month.
Oracle primarily sells database management programs, a market in
which PeopleSoft does not participate. However, Oracle also sells
business applications software, a market in which it competes with
PeopleSoft as well as other software makers such as Germany's
SAP.
The commission may also investigate any potential effects in the
relational database market, where Oracle has a particularly strong
presence.
The European Commission and the antitrust division of the US
Department of Justice (DoJ) are co-operating in this case, which
requires regulatory approval on both sides of the Atlantic. The DoJ
examination of the proposed deal is expected to conclude in January
or February.
Paul Meller writes for IDG News Service