STRASBOURG, France – European Union antitrust regulators cleared Oracle Corp.'s (ORCL) hostile $7.7 billion bid for rival business software maker PeopleSoft Inc. (PSFT) on Tuesday, removing one of the last major hurdles in the contested takeover fight.
No conditions were placed on the decision, which came after a yearlong investigation halted several times while also under scrutiny in the United States.
"There is an absence of sufficient evidence of competitive harm," the European Commission said in a statement.
The decision by the European Commission (search), which initially opposed the deal, comes a few weeks after the U.S. Department of Justice dropped its challenge to the combination of the business software makers.
PeopleSoft said its board, which has "unanimously rejected each of Oracle's offers," would review the "implications" of the EU decision.
A U.S. judge had ruled that Washington was wrong to argue that Oracle's proposed takeover of PeopleSoft would damage competition in a software market for "large complex enterprises."
The deal would reduce the number of companies specializing in business enterprise software from three to two, although Germany's SAP AG (search) would retain its No. 1 ranking.
But the Commission said it found large multinationals that use such software "have other suppliers to serve their needs beside Oracle, Peoplesoft and SAP." Thus, "the markets would remain competitive," it said.
The commission said it closely cooperated with U.S. regulators in its investigation and also "took into account" evidence that came out during the trial in California of the U.S. objections.
Oracle is fighting in a U.S. court now to invalidate PeopleSoft's antitakeover defenses. Oracle has indicated it will fire more than half of PeopleSoft's 11,500 employees if its takeover effort succeeds.
Redwood Shores, Calif.-based Oracle launched its hostile bid for Pleasanton, Calif.-based PeopleSoft in June 2003. Last week, Oracle extended its tender offer of $21 per share to Nov. 5.
Oracle shares were up 10 cents to $12.23 while PeopleSoft share were up 24 cents at $20 Tuesday on the Nasdaq Stock Market (search).