German enterprise business software giant SAP said it will US cloud-based e-commerce firm Ariba for $4.3 billion in a deal that will significantly change the enterprise cloud space.
SAP will acquire Ariba for $45 a share , a twenty percent premium to Ariba’s stock closing price, Ariba’s board has unanimously approved the deal. Ariba’s Shares were halted in recent trading.
SAP said the purchase of Ariba will create new a new business model for business-to-business collaboration in the cloud and positions SAP in a fast-growing segment as demand for cloud-based services increases. Ariba, which uses technology with a web-based trading community to help companies collaborate with a global network of partners in a cloud-based environment, had $444 million in total revenue SAP said it plans to consolidate all cloud-related supplier assets of SAP under Ariba.
"The acquisition will combine Ariba's successful buyer-seller collaboration network with SAP's broad customer base and deep business process expertise to create new models for business-to-business collaboration in the cloud," a statement by the firms said.
"The move positions SAP in a fast-growing segment as buyers and sellers across the globe connect in new ways through the cloud."
Headquartered in Sunnyvale, California, Ariba has approximately 2,600 employees and had $444 million in total revenue last year,
"The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners," said SAP co-chief executives Bill McDermott and Jim Hagemann Snabe.
"Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud."
SAP's American depositary shares were up 12 cents to $58.91 in recent trading.