Oracle is one step closer to taking over rival PeopleSoft now that a federal judge has ruled against the federal government’s effort to thwart the $7.7 billion hostile bid over antitrust concerns, a decision that could spark a rash of tech-sector acquisition attempts.
The ruling removes “a major hurdle to one of the biggest mergers in Silicon Valley history,” USA Today declared and “is a big blow to PeopleSoft, which has repeatedly cited antitrust concerns as one of the primary reasons for spurning” business software maker Oracle Corp. Yesterday’s ruling “represented almost total vindication for Oracle, which has argued for months that first PeopleSoft, based in Pleasanton, and then the Justice Department were misguided to argue the deal would be anti-competitive,” the San Jose Mercury News said.
The Justice Department had sued to block Oracle’s proposed takeover, but the federal government’s case got slammed in the new ruling. “U.S. District Court Judge Vaughn R. Walker in San Francisco … faulted the Justice Department for defining too narrowly the market for high-end human resources and payroll software and said there would be enough remaining rivals after a merger to assure healthy competition.
Walker’s decision increases the pressure on PeopleSoft to negotiate directly with Oracle,” The Washington Post wrote in its synopsis of yesterday’s ruling. “Walker’s decision, following a month-long trial earlier this summer, was a stinging — and rare — defeat for government antitrust regulators. … The government failed to prove that large businesses can turn to only three suppliers — Oracle, PeopleSoft and [German company] SAP — for business applications software, he found. Rather, he said, other rivals, including Microsoft and technology-outsourcing firms, could constrain anticompetitive actions by Oracle,” the Wall Street