‘Oracle, BEA make a good pair’

PALO ALTO, California: If Oracle Corp., the world's second-biggest software company, and BEA Systems Inc., were to merge it could help both battle rival IBM Corp. "We would view an (Oracle-BEA) marriage as a good pairing, beneficial to both companies on both a strategic and tactical level," Sanford C. Bernstein analyst Charlie Di Bona said in a client note.

Spokeswomen for both BEA and Oracle said they do not comment on rumors or speculation. Oracle executives have said in the past that buying BEA would make sense, at the right price. Earlier, Goldman Sachs analyst Rick Sherlund also said a merger between the two could be a good fit.

Di Bona said Oracle, best known for its high-end databases, would offer BEA a system-level tool set that the application server software maker needs to flesh out its offering, as well as a huge installed base of database customers.

Acquiring BEA -- a leading maker of software and tools to build, run and integrate Web-based business applications -- would close a gap in Oracle's strategy, giving the company an independent play in the integration and Web services platform market, he added.

Oracle has long held that it does not like to buy other companies, and Di Bona said that merging and retaining BEA's staff could present a problem.

"All in all, depending on the specific terms and on the handling of the critical cultural issues, we would view the acquisition of (BEA) by (Oracle) as a net positive for both companies and stock over the long run," Di Bona said. At current levels, Oracle's market value is about $68.5 billion, compared with BEA's $4.4 billion.

© Reuters