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Report: EU Close To OK'ing Oracle Takeover Of PeopleSoft

Sep 24, 2004 (08:09 AM EDT)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=47902730


Amid reports that the European Commission is poised to approve Oracle's proposed takeover of PeopleSoft, a spokesperson for the European Union said Friday that the EU's competition commissioner, Mario Monti, would like to finish the case before he leaves his post at the end of October.

Amelia Torres, Monti's spokesperson, declined to comment on press reports by the Financial Times and Reuters that the Competition Commission had decided to approve Oracle's $7.7 billion offer to acquire software rival PeopleSoft. The EU investigation of the takeover bid is the last remaining major hurdle for Oracle.

Separately, European sources speculated that a recent U.S. Federal Court decision in San Francisco favoring Oracle's bid would likely influence the European study, because antitrust experts in the EU commission and in the U.S. Department of Justice had similar takes on the takeover offer. When the San Francisco judge ruled against the Justice Department's attempt to block the merger, the air went out of the tires of the EU's case, too, the European sources said.

After the San Francisco decision was issued, Torres noted that the EU had been following the U.S. case closely, and its staff would carefully read the opinion of U.S. District Court Judge Vaughn Walker. At the time, she said, the EU had "stopped the clock" on its examination of the case pending the outcome of the U.S. case.

On Friday, she said the EU was still in contact with Oracle seeking information, and that the clock hadn't been restarted yet; Torres couldn't say precisely when it would be restarted. Monti is scheduled to leave his post at the end of October, and Torres said he would like to see a final disposition in the Oracle-PeopleSoft case before that time.

The Financial Times, citing "people familiar with the case," said Monti had favored approving Oracle's bid, even before Judge Walker's decision. Walker, who has a strong background in antitrust, wrote a 164-page opinion that dismissed the DOJ's arguments; The Justice Department could still appeal Judge Walker's decision. In addition, several U.S. states are opposing Oracle's takeover of PeopleSoft.

Monti was also the point man in the EU's sweeping decision against Microsoft, which was fined more than $600 million and ordered to change some of its business practices. A decision favoring Oracle's takeover of PeopleSoft would change the software landscape in Europe, but wouldn't likely have heavy impact on the issues involved in the Microsoft case.

In a new development in the EU Microsoft case, European aircraft manufacturer Airbus, which had reportedly made a filing favorable to Microsoft in recent days, was said to have withdrawn the filing, leaving Microsoft without the influential ally in the case. Microsoft has long argued that some of the sanctions issued against it would inhibit companies in other industries if the Microsoft case becomes a precedent. The Microsoft case is still on appeal in Europe and could take several months to reach a final conclusion.