Business Objects SA has agreed to acquire Crystal Decisions in a $US820 million cash and stock deal that will create a one-stop shop for business intelligence software products.
"The combined company will be number one in each of the main markets it serves," Business Objects chairman and chief executive officer (CEO), Bernard Liautaud, said.
Business Objects specialises in ad hoc querying, reporting and analysis tools, while Crystal Decisions focuses on enterprise reporting.
With little overlap in the product lines, both companies' offerings would continue to be supported after the takeover and the combined sales team will sell all products, Liautaud said.
Plans were in place at both Business Objects and Crystal Decisions to enter each other's market in the future, but those plans would be cancelled, he said.
"Today the products have little overlap, but in the long term both product teams have plans to overlap each other," Liautaud said. "We will reorganise the research and development energies to . . . drive them to new products in new areas of business intelligence that have potential."
Crystal Decisions president and CEO, Jon Judge, said combining his company with Business Objects accomplished "almost every strategic imperative" Crystal Decisions had.
"This is the defining moment for the business intelligence industry," he said.
Under the terms of the agreement, Business Objects will issue 26.5 million new shares, which will represent about 29 per cent of the combined company's shares. In addition Crystal Decisions owners will receive $US300 million in cash, the companies said.
The deal, expected to close in the fourth quarter and subject to customary conditions such as shareholder and regulatory approval, should also result in about $US25 million in cost savings next year as a result of synergies.
Business Objects, with dual headquarters in San Jose, California, and Paris, is seen by Gartner analysts as the business intelligence market bellwether.
The California-based Crystal Decisions, is also seen as a strong vendor, according to Gartner research notes published earlier this year.
Business Objects also announced preliminary results for the second quarter, ended June 30. The company expects revenue to be in the range of $US127 million to $US129 million, and earnings per share to be between $US0.17 and $US0.18.