Oracle's PeopleSoft bid blocked

Oracle's bid to acquire rival ERP company PeopleSoft suffered a blow last week when the US Department of Justice moved to block...

Oracle's bid to acquire rival ERP company PeopleSoft suffered a blow last week when the US Department of Justice moved to block the proposed merger.

"If the merger were allowed to proceed, it would eliminate competition between two of the nation's leading providers of human resources and financial management enterprise software applications, resulting in higher prices, less innovation and fewer choices for the businesses, government agencies and other organisations that depend on this type of software," the Department of Justice said.

PeopleSoft president and chief executive Craig Conway called on Oracle to abandon its takeover bid. "Both companies should now devote all of their energy to competing in the marketplace to provide better products and services for customers," he said.

Oracle is set to challenge the Department of Justice's decision. On its website Oracle said, "The department's claim that there are only three suppliers that meet the needs of large enterprises does not fit with the reality of the highly competitive, dynamic and rapidly changing market."

Ronan Miles, chairman of the Oracle User Group, said, "If the DoJ rules that Oracle cannot acquire, then our concern would be that no other large competitor should be allowed to."

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