M&A

Monday’s Middle-Market Mergers

Oracle and Siebel; Wachovia and Westcorp.; eBay and Skype.
Stephen TaubSeptember 12, 2005

It’s merger Monday, especially among middle-market companies.

The biggest blockbuster of the day is Oracle Corp.’s agreement to buy Siebel Systems for $5.85 billion in cash and stock. Siebel has $2.24 billion in cash, reported BusinessWeek, reducing Oracle’s net cost to about $3.6 billion.

The transaction — Oracle’s seventh deal this year, according to Bloomberg — will make the Redwood Shores, California-based company the largest seller of customer relationship management (CRM) software, according to chief executive officer Larry Ellison.

Tom Siebel founded Siebel in 1993, three years after leaving Oracle, where he was a marketing executive, Bloomberg also pointed out. Indeed, Craig Conway — the former CEO of PeopleSoft, which was acquired by Oracle for $10.3 billion last winter — is also a former Oracle executive.

The announcement came on the same day that Ellison tentatively agreed to pay $100 million to charity to resolve a lawsuit charging him with engaging in insider trading in 2001, according to press reports. The deal awaits approval from a California court and Oracle’s board of directors. Ellison and former chief financial officer Jeff Henley won a summary decision last year in a similar lawsuit in Delaware.

Meanwhile, Wachovia Corp. agreed to pay $3.9 billion in stock to buy Westcorp Inc. and WFS Financial Inc.

The nation’s fourth-largest bank will pay $3.42 billion for Westcorp., a financial-services company that owns 84 percent of auto finance company WFS as well as California’s Western Financial Bank, according to Reuters. Wachovia will also pay $490 million for the 16 percent of WFS held by the public.

The acquisition will make Wachovia the nation’s ninth-largest auto loan originator, the bank reportedly added.

And eBay Inc. agreed to buy communications company Skype Technologies SA, best known for providing voice communications over the Internet, for $2.6 billion in cash and stock. In a press release, eBay asserted that the acquisition will strengthen its global marketplace and payments platform while opening several new lines of business and “creating significant new monetization opportunities for the company.”