Ellison, the Oracle chief executive, now faces an impasse in his $9.4-billion bid for PeopleSoft. Today the U.S. Department of Justice said it would block Ellison to protect competition in the business software sector. Seven states also said they would sue to block the deal.
Oracle has earlier hinted that it would sue the Justice Department if the feds moved to block the deal. Today, Oracle did not address whether it would file that suit, but the firm did issue a statement blaming the department's decision on an "aggressive lobbying campaign by PeopleSoft management."
Oracle shares closed slightly higher on the news at $13.28. PeopleSoft fell 1.6% to $21.78.
In a statement, the Justice Department asserted that "if the merger were allowed to proceed, it would eliminate competition between two of the nation's leading providers of human resource and financial management enterprise software applications, resulting in higher prices, less innovation and fewer choices for the businesses, government agencies and other organizations that depend on this type of software."
Oracle responded that the statement is "inconsistent with the overwhelming evidence of intense competition in the markets we serve, and we believe it is without basis in fact or in law."
View: Complete article at Forbes
View: Neowin - It's Official: Government To Fight oracle Bid For PeopleSoft
News source: Forbes
