EU puts Oracle investigation on hold

13 January 2004 Software giant Oracle is facing another delay to its hostile bid for rival PeopleSoft.


The European Commission’s antitrust investigation into the $7.3 billion bid has been suspended to allow Oracle to submit more information on market definitions.

The Commission began its review in November 2003 and was due to report by 30 March 2004. It is yet to set a new deadline.

The delay means that any takeover, if approved by regulators and PeopleSoft shareholders, is unlikely to go through before autumn 2004 — more than a year after Oracle launched its original $5.1 billion bid in June 2003.

Acquiring PeopleSoft would help make Oracle a serious rival to business applications market leader SAP, but the Commission is concerned this will create a duopoly, particularly in the markets for human resources and finance applications.

Oracle has suggested that growing rivalry from other vendors, particularly Microsoft, would prevent a duopoly emerging and ensure continued competition in the market.

Such delays are increasingly common in EU investigations, but often reflect a desire to coordinate with corresponding investigations in the US. As such, the mid-March deadline for antitrust regulators in the US Department of Justice could also be postponed.

Separately, Oracle has announced that CEO Larry Ellison is to step down as chairman, as part of a wider reshuffle of the company’s board. He will hand over the position to Jeff Henley, Oracle’s chief financial officer.

Michael Boskin, the independent director at Oracle who chairs the company’s board-level nominating committee, claims the change was made to allow the promotion of three other executives, not to limit Ellison’s influence. He stressed that Ellison will remain Oracle’s leader “for quite some time yet”.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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