The European Commission has given the green light to the
proposed Oracle acquisition of PeopleSoft, European Union
Competition commissioner Mario Monti said.
The commission said that it was unable to find "sufficient
evidence of competitive harm" to the market for enterprise software
from the potential merger.
The ruling by the commission removes the remaining regulatory
obstacle to Oracle to proceed with its hostile takeover of
PeopleSoft.
It said that large companies that use software to automate their
financial management systems and their human resource processes had
other suppliers to serve their needs beside Oracle, PeopleSoft and
SAP.
Following an in-depth investigation into the effects of the
merger on the enterprise software market, in particular for
business functions such as financial planning and reporting and
human resources processes, the commission found that even though
the proposed merger would reduce the number of big players from
whom companies could source software from three to two, the market
would remain competitive.
In particular, the commission found that customers usually
invited various suppliers to bid for enterprise software projects
and that other suppliers had won bids for large and complex
enterprises in competition with Oracle, PeopleSoft and SAP.
Even Microsoft, which is a relative newcomer to the business
application software market, managed to win bids in the enterprise
segment and therefore appeared to offer additional competition, the
commission said.
The commission, the EU's executive arm and its antitrust
regulator, reached its conclusion after analysing hundreds of bids
for human resources and financial management software projects.
It found that Oracle's bidding behaviour was not affected by
whether PeopleSoft or SAP were rival bidders, suggesting that any
discounts offered by Oracle were not determined simply by a desire
to outbid competing bids from PeopleSoft or SAP.
The commission also said that the product differences, the
different size of the various players' market share and a lack of
price transparency suggest that there was no market
co-ordination.
In reaching its decision, the commission said it worked in close
cooperation with the US Department of Justice (DOJ), which was
opposed to the merger. A federal judge in San Francisco last month
rejected the DOJ's effort to block Oracle on antitrust grounds. The
commission, however, said that its investigation took into account
the evidence made available during the US case.
PeopleSoft issued a statement after the commission's
announcement, saying its board of directors will review the
decision's implications. The company reiterated that PeopleSoft's
board "has carefully considered and unanimously rejected each of
Oracle's offers", including the current offer of $21 (£11) a
share.
Simon Taylor writes for IDG News Service