Business in the New Year: Early News
- In January 2008 we took over Business Objects, and
squeezed out the residual minority shareholders in
February. Business Objects is a provider of solutions in
the field of business intelligence. In the Gartner Magic
Quadrant for Business Intelligence Platforms 2008,
Business Objects is in the Leaders segment. Directly
and via channel partners, Business Objects markets
technology, consulting, and training services designed to
deliver the intelligence and solutions that enterprises of
all sizes need to make well informed business decisions.
Our new subsidiary has twin headquarters in San Jose,
California, and Paris, France. Taking into account expected
transaction costs, we estimate that the cost of acquiring
Business Objects slightly exceeds €4.8 billion.
The cost includes €0.5 billion, approximately the nominal
value of the outstanding convertible bond of , which SAP
acquired as part of the transactions. As a result, the
purchase price for equity-related securities amounts to
approximately €4.3 billion.
Based on preliminary valuations, we expect to acquire
assets of approximately €1.9 billion to €2 billion including
identifiable intangible assets of about €0.9 billion and
cash of around €0.8 billion. The assumed liabilities are
expected to amount to between €1.2 billion and €1.3 billion,
including the acquired convertible bond at face value.
We expect that goodwill resulting from this planned acquisition
will be approximately €3.5 billion, which will
not be tax deductible We are still in the process of evaluating
the assets, liabilities, and contingencies, so the
figures presented here may still change significantly. The
allocation of goodwill to our reportable segments will
depend on our final management structure, which has
not yet been determined. The goodwill results from expected
synergies and acquired workforce, which are not
identifiable intangible assets under SFAS 142. They
therefore cannot be capitalized separately but are included
in goodwill. We expect the effect on our U.S. GAAP
earnings per share to be positive in 2009 and subsequent
years. We expect the acquisition will have a nonrecurring
negative effect on our U.S. GAAP earnings per
share in 2008 around the middle of the single-digit euro
cent range. For more information about the effect of the
acquisition of Business Objects, see the discussion of
our operational outlook for 2008 in this review of operations.
In taking this step, we are uniting two of the leading
companies in the global IT industry. The combination of
Business Objects solutions with our technologies puts
us in a position to offer a unique portfolio of products
that give business users – process owners and decision
makers in business – a full view of the intelligence they
need for effective decision processes. Together, SAP
and Business Objects want to develop top quality solutions
for these business users, while continuing to grow
their business with their customer base. One of the
most important elements in our strategy for growth is
increasing our new product revenue, focusing especially
on the business user segment, where we believe demand
is growing and is potentially enormous. We believe
this acquisition will accelerate our growth in the business
user segment, give us a competitive edge – most notably
in the field of business intelligence software – and
take us nearer our declared aim of doubling our market
potential by 2010.
- The Supervisory Board appointed John Schwarz the
seventh member of our Executive Board with effect from
March 1, 2008. John Schwarz is the managing director
of Business Objects, which is now an independent business
unit within the SAP Group.
- In February 2008, the Great Place to Work institute
once again named us Germany’s best employer. For the
fourth year in a row, SAP achieved the top ranking in the
category for companies in Germany with more than
5,000 employees.
- We also took various steps to further improve our business.
