Oracle to acquire Siebel in £3.2bn deal

Oracle buys Siebel in £3.2bn deal

Oracle is to acquire customer relationship management (CRM) software provider Siebel in a $5.8bn (£3.2bn) deal.

The deal, which is dependent on a vote by Siebel shareholders, is set to close in early 2006.

Oracle will maintain support for Siebel products while incorporating the company's CRM product range into its own, says chief executive Larry Ellison.

'This acquisition meets Oracle's two key criteria for a large buy, it is immediately accretive and strategically sound, it makes us number one in a market where we already participate,' he said.

'Siebel is the CRM category leader, with more than 4,000 customers and 3.4 million users live, so this move makes us number one in sales automation.'

Siebel founder Tom Siebel says that this is a very exciting day for him, his company, and its customers.

'This is a very natural business combination, and a customer driven event. We have been encouraged to move together by customer and partners over and over again, particularly in the last couple of years,' he said.

'The combination of Oracle's capability with Siebel CRM technologies and our domain leadership will assure the continued success and advancement of this technology.'

Gartner fellow Simon Hayward says the acquisition is a good one for Oracle, giving the company a significant new customer base, but it might be difficult to integrate such a large company.

'PeopleSoft was a big bite to chew, and Siebel will be the same, the more of these big bites Oracle takes, the harder it is to chew,' he said.

'Remember that the PeopleSoft story is not totally worked out yet, Oracle has yet to produce any new products for that customer base.'

The purchase of Siebel is Oracle's ninth acquisition of a company or product in less than 12 months, and means the vendor will be supporting four CRM applications - its own, Siebel, and those previously provided by PeopleSoft and JD Edwards.