SAP agrees to buy Business Objects for 4.8 bln euro

By Georgina Prodhan, European Technology Correspondent

FRANKFURT (Reuters) - SAP (SAPG.DE) has agreed to a cash offer to buy software group Business Objects BOBJ.PA BOBJ.O for about 4.8 billion euros ($6.8 billion) in the face of an aggressive acquisition spree by rival Oracle (ORCL.O).

The world's leading business software maker said on Sunday the primary driver for the acquisition, its biggest and a reversal of its avowed organic-growth strategy, was the potential to gain new business.

Germany-based SAP is racing to more than double its customer base to 100,000 by 2010, mainly by winning more small and medium-sized companies as clients.

Its 42 euros-per-share offer represents a 20 percent premium over Business Objects' closing price on Friday and values Business Objects at about 4.07 billion euros.

SAP said the transaction including costs was worth just over 4.8 billion euros and would be financed through cash and loans.

Franco-American Business Objects, whose business-intelligence software helps companies to mine mountains of data to detect market trends, reported preliminary third-quarter results just after SAP's announcement that fell short of expectations.

It said that according to preliminary results it would report earnings per share of $0.36-$0.39, compared with the average estimate of $0.51 in a Reuters poll of analysts.

Sales would be between $366 million and $370 million, also below the poll's average of $385.1 million.