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Oracle's Bid for PeopleSoft Faces Antitrust Scrutiny

Strategic Insights

— 2 min read

The Justice Department's antitrust staff is recommending that Oracle Corp.'s $9.4 billion hostile bid for PeopleSoft Inc. be blocked, citing concerns that the merger would narrow the market for some corporate-applications software. Oracle's bid has been opposed by PeopleSoft's largest customers, including universities and state governments, which have expressed concerns about the potential impact on competition. The antitrust review has dragged on for over a year, with the agency grappling with the central issue: Is the market for business software a competitive one with many players, or is it limited to three large players?

Key Takeaways:

  • The Justice Department's antitrust staff recommends blocking Oracle's bid for PeopleSoft, citing concerns about the potential impact on competition.
  • Oracle's bid has been opposed by PeopleSoft's largest customers, including universities and state governments.
  • The antitrust review has dragged on for over a year, with the agency grappling with the central issue: Is the market for business software a competitive one with many players, or is it limited to three large players?
  • PeopleSoft has rejected Oracle's sweetened offer, setting the stage for a showdown at the company's shareholder meeting on March 25.
  • Oracle executive Larry Ellison has said he may recommend to Oracle's board that the company go to court to fight the government's request for an injunction.
  • Microsoft has detailed three new flaws in its flagship Windows operating system, one of which is critical, that could give hackers an open door to computer systems.
  • The vulnerability was discovered six months ago but was not reported until yesterday, adding to pressure on Microsoft to improve the security of its products.
  • The Financial Times reported that the warning will add to pressure on Microsoft to intensify efforts to improve the security of Windows.
  • Microsoft classified one of the vulnerabilities, first discovered six months ago, as "critical" because it cannot be guessed how many applications depend on the affected protocol.

Statistics:

  • Oracle's bid for PeopleSoft is worth $9.4 billion.
  • The Justice Department's antitrust staff recommends blocking the merger.
  • PeopleSoft's largest customers, including universities and state governments, have opposed the merger.
  • The antitrust review has dragged on for over a year.
  • 40 institutional investors, analysts, and corporate governance experts have met with Eisner in the last six weeks to quiet criticism of his company's performance and managerial style.
  • Microsoft detailed three new flaws in its flagship Windows operating system.
  • One of the vulnerabilities, first discovered six months ago, is classified as "critical."
  • Microsoft has released a patch to address the security vulnerability.

Sources:

  • The Associated Press via washingtonpost.com: Feds Recommend Blocking Oracle Bid (Registration required)
  • CNET's News.com: Justice Department Staff Opposes Oracle Bid
  • The San Francisco Chronicle: PeopleSoft Deal Gets Thumbs-Down
  • The Financial Times: Oracle's Bid For PeopleSoft Opposed By DOJ
  • The San Jose Mercury News: Oracle Dealt Key Setback On Hostile Bid
  • The Wall Street Journal: Justice Department Lawyers Recommend Against Oracle Deal (Subscription required)
  • Reuters via washingtonpost.com: DOJ Urges Against Oracle PeopleSoft Bid (Registration required)

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