SAP to Buy Software Maker Sybase for $5.25 Billion (SAP, SY)

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German enterprise software company SAP AG ( SAP ) said late Wednesday that it will acquire database and mobile software maker Sybase ( SY ) for about $5.25 billion in cash.

The $65 per-share offer represents a nearly 57% premium over Sybase's Tuesday closing price of $41.57.

The acquisition is designed to help SAP keep pace with its main rival in the industry, Oracle ( ORCL ) . In pursuant to the agreement, Sybase will remain a standalone unit. The deal is expected to close in the third quarter of this year.


SAP said it will finance the deal with cash on hand, as well as a 2.75 billion euro loan from, which has been arranged by Barclays Capital and Deutsche Bank.

SAP shares fell 40 cents, or -0.9%, in premarket trading Thursday.

The Bottom Line
We have avoided shares of SAP since our early June 2008 coverage began, when the stock was trading at $53.55. The company has a 1.11% dividend yield, based on last night's closing stock price of $44.90. The stock has technical support in the $38-$40 price area. If the shares can build momentum on this morning's news, we see overhead resistance around the $48-$50 price levels. We would remain on the sidelines for now.

SAP AG ( SAP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by Dividend.com


This article appears in: Investing , Stocks

Referenced Stocks: ORCL , SAP , SY

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