SAP Splashes Out $4.3 Billion To Acquire Ariba

There's been thunder in the cloud world today, with SAP America moving to acquire Ariba, the cloud based business commerce network, for around $4.3 billion.

That price represents a 20 per cent premium over and above Ariba's stock at the close of the 21st of May, meaning SAP is forking out $45 per share. The money will be partly drawn from SAP's pile of free cash, topped up by a 2.4 billion Euro loan.

Ariba's board of directors voted unanimously in favour of the move, and pending stockholder approval and the usual ticking of regulatory boxes, the deal will go through in the third quarter.

What does SAP get for the money? The leading light in the field of business-to-business collaboration will join its existing cloud solutions, and considerably expand its avenues of potential growth.

Ariba, which is based in California where it has 2600 staff on the books, is the second largest cloud vendor by revenue, having experienced growth levels of near 40 per cent last year.

The Ariba commerce network boasts intelligence of over 730,000 companies, and automates something in the order of $320 billion in global business transactions.

SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe commented: "The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners.

"Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP's growth in the cloud."