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 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.

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This article appears in: Investing , Stocks

Referenced Stocks: ORCL , SAP , SY

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