Justice Department moves to block Oracle-PeopleSoft deal
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<font color="CC0000">(UPDATED) </font color>In one of the sharpest blows yet to Oracle Corp.'s hostile attempt to take over software rival PeopleSoft, the federal government sued to block the deal. Oracle says it will fight the lawsuit.<br>
In one of the sharpest blows yet to Oracle Corp.'s hostile attempt to take over software rival PeopleSoft, the federal government sued to block the $9.4 billion deal today.
'This transaction is anticompetitive'pure and simple,' R. Hewitt Pate, an assistant attorney general in the Justice Department's Antitrust Division, said in a statement. 'Under any traditional merger analysis, this deal substantially lessens competition in an important market.'
Earlier this month, Justice lawyers recommended that the government oppose the merger, and attorneys general from seven states joined the lawsuit, which was filed in Federal District Court in San Francisco.
Only three companies ' Oracle, PeopleSoft and SAP - sell sophisticated integrated human-resources management and financial management software, the Justice Department said.
'Large companies, institutions, organizations and government entities depend on competition to provide and maintain enterprise software that is critical to their effective and cost-effective day-to-day operations,' Pate said. 'This lawsuit seeks to ensure that there will continue to be vigorous competition in this important industry.'
Oracle made its offer for PeopleSoft of Pleasanton, Calif., last June, days after PeopleSoft announced it would by software provider J.D. Edwards & Co.
Oracle vows to press on with its current offer of $26 a share. On Friday, the company said its board "decided to vigorously challenge" the civil suit.
"The Department of Justice decision follows an aggressive lobbying campaign by PeopleSoft management," Jim Finn, an Oracle spokesman, said in a statement. "It is inconsistent with the overwhelming evidence of intense competition in the markets we serve, and we believe it is without basis in fact or in law. A combined Oracle-PeopleSoft will significantly benefit all customers and shareholders involved."