Oracle drops Microsoft-SAP merger bombshell

In a powerful attack on the U.S. Government's case to block its multi billion dollar takeover bid for rival business software maker PeopleSoft, Oracle's counsel Dan Wall claimed yesterday on the opening day of the keenly anticipated antitrust trial that Oracle's bid sparked a move by Microsoft to enter merger talks with SAP.

Should the claim turn out to be grounded in fact, the revelation could turn the case strongly in Oracle's favour, as when the U.S. Justice Department made its decision to block Oracle's bid for PeopleSoft, it refused to countenance Oracle's assertion that Microsoft was a competitor in the enterprise business application software space. Therefore, should it be true that Microsoft was in merger talks with the German software maker, it would blow the U.S. DoJ's argument out of the water, as SAP is the largest player in the market.

Wall also argued against the DoJ's claim that an Oracle-PeopleSoft merger would result in a duopoly, with Oracle and SAP able to force up prices as a consequence.

"So long as SAP is in town, we have to compete aggressively," said Wall.

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