SoftwareAG closes WebMethods deal

Infrastructure software specialist extends global reach with $546m WebMethods acquisition

Infrastructure software specialist Software AG has today completed its $546m acquisition of middleware vendor WebMethods in a deal the company said will extend its global reach and enhance its ability to serve the growing service-oriented architecture (SOA) and business process management (BPM) markets.

Karl-Heinz Streibich, chief executive at Software AG, said the increased scale of the combined companies willl deliver a "significantly strengthened product portfolio, expanded global services and support, and unquestionable financial strength".

The company said the deal was part of a strategy to build a €1bn company by 2011, which would be large enough to compete more regularly with global rivals such as IBM and Oracle.

However, some experts have raised fears that the acquisition of WebMethods will result in considerable product overlap and integration difficulties.

Speaking when the deal was announced in April, Neil Ward-Dutton of analyst firm Macehiter Ward-Dutton said, "On paper there’s an awful lot of overlap. It’s not like they’re buying technical capabilities they didn’t have."

Streibich downplayed fears that the merger will result in integration difficulties and disruption to development and sales teams. He insisted that a combined product roadmap is already in place and added that the company is " fully committed" to continuing investments in product development.

The company also insisted that although some cost savings would result from the deal, "continued investments will be made in retaining key research and development know-how and maintaining a stable sales force and customer relationships".