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Computer Associates' Sterling acquisitioncomes under scrutiny

Computer Associates has confirmed that the US Department of Justice is looking into its $4bn (£2.6bn) acquisition of Sterling...

Computer Associates has confirmed that the US Department of Justice is looking into its $4bn (£2.6bn) acquisition of Sterling Software.

CA said in a statement that the DOJ's inquiry into the March 2000 purchase of the e-business software company raised questions similar to those the DOJ posed about its buyout of Platinum Technology International, a mainframe systems management products maker.

Last September the DOJ filed a lawsuit against CA seeking up to $1.27m (£879m) in civil penalties from the company for prematurely taking control of Platinum, a practice known as "gun-jumping". CA denied the charge.

However, in its statement yesterday, CA said it was told by the DOJ that the inquiry into its takeover of Sterling was "dormant even though it remains open".

In the Platinum lawsuit, the DOJ accused CA and Platinum of breaking pre-merger waiting period requirements and price-fixing laws when CA bought Platinum in a $3.5bn (£2.4bn) deal announced in 1999. The DOJ eventually approved the sale, subject to certain conditions.

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