Germany’s Software AG hopes to merge with IDS Scheer in euro477 million offer for Scheer shares

Software AG hopes to merge with IDS Scheer

FRANKFURT — Germany’s Software AG said Tuesday the company hoped to acquire 100 percent of fellow software company IDS Scheer AG in a bid to increase its presence and global competitiveness.

Darmstadt-based Software AG said it would likely spend euro477 million ($668 million) for all outstanding shares of Saarbruecken-based IDS Scheer at about euro15 a share, and that it had already had a commitment from the company’s two main owners for the 48 percent of the share capital those two individuals hold.

The transaction would start in August and end in September, Software AG said.

Software AG said the offer had to be reviewed by relevant authorities and it would know more about IDS Scheer shareholders’ acceptance toward the end of the third quarter.

Software AG — currently Germany’s second largest software company after SAP AG — said the combination of the two companies will give them a sustainable and strengthened competitive position.

“By reaching a critical size in more key European markets, the company market access will be significantly improved,” Software AG wrote in its report.

“In addition, the consulting expertise of IDS Scheer will allow Software AG to increase market penetration of its own products in industry-specific and large projects.”

The combined company could see revenues of euro1 billion in 2010, if the integration progresses quickly, Software AG spokesman Paul Hughes said.

In 2008 Software AG saw revenues of euro720 million.

Shares of Software AG were down about 5 percent at euro48, while shares of IDS Scheer were up nearly 40 percent at around euro15 in Frankfurt afternoon trading.

On the Net:

www.softwareag.com

www.ids-scheer.com