A US federal judge ruled on Thursday that Oracle, the US' second-largest software company, could proceed with its hostile bid for PeopleSoft, handing the Justice Department a rare defeat in a legal challenge to a corporate merger. \nThe Justice Department sought to block Oracle's US$7.7 billion offer for PeopleSoft on the grounds that combining the two companies would reduce competition in the market for software that large corporations use to manage their finances and employee records. \nBut Judge Vaughn Walker of the US District Court in San Francisco rejected the government's definition of the market as too narrow, noting that the software business is particularly dynamic, with a host of current and emerging competitors in that area, including Microsoft. \nAntitrust experts and industry analysts said the court decision, which can be appealed, could open the way for more mergers in the software industry if big companies like Oracle, IBM and Microsoft feel less constrained by the prospect of antitrust challenges. The European Commission is continuing to investigate the proposed merger. \n"Oracle may be the biggest beneficiary of this ruling, but it makes acquisitions to consolidate the industry easier for others as well," said Charles Di Bona, a software analyst for Sanford Bernstein & Co. \nMicrosoft, the world's biggest software company, played a prominent role in the trial even though it was not a party to the case. Fear of Microsoft's market power was part of Oracle's motivation in seeking a merger. \nIn the six-week trial this summer, Oracle insisted that buying PeopleSoft was essential to its strategy of expanding to cope with increasing competition from Microsoft. \nOn the eve of the trial, Microsoft was forced to disclose that it had talked with SAP, the big German business software maker, about acquiring that company. And during the trial, witnesses for Oracle pointed repeatedly to Microsoft's ambitions and aggressive spending in the business software market. \nAsked to comment on Thursday, Andrew Gavil, a law professor at Howard University, said, "The entry of another formidable competitor makes it harder to argue that it is a stable market where entry is difficult and the acquisition would really hurt competition." \nThe Justice Department, however, argued that the merger of Oracle, the second-largest company in the business software arena, and PeopleSoft, the third-largest, would create a "duopoly" that would harm consumers. \n"The merger would end fierce head-to-head competition that has brought customers lower prices and better products," said Claude Scott, the government's lead lawyer, in closing arguments on July 20. \nBut Walker did not find that argument sufficiently convincing. "Plaintiffs have not shown by a preponderance of the evidence that the merger of Oracle and PeopleSoft is likely to substantially lessen competition in a relevant product and geographic market," he wrote in a 164-page ruling. \nWalker found that the market for business software was a global one, and not limited to the US. And he also noted that several other companies, including Microsoft and Lawson Software, were competing in the field. \nPeopleSoft executives would not comment on the decision directly, saying only that its directors would review the implications of the ruling. The news caused PeopleSoft's shares to jump 15 percent to US$20.57 in after-hours trading, after closing at US$17.95. \nThe unusual corporate takeover battle began in June last year, when Oracle made the first of four hostile offers for PeopleSoft, a maker of financial and human resources software. At the time, Oracle's famously outspoken chief executive and founder, Lawrence Ellison, said candidly that he had scant interest in PeopleSoft's technology or products. Oracle, he said, was mainly interested in acquiring PeopleSoft's corporate customers and switching them to Oracle's competing software. \nOracle's move, Ellison asserted, was merely one step in the inevitable consolidation in the software industry that was necessary because of slower long-term growth for the technology sector. \nThis elicited outrage from PeopleSoft, which is based in Pleasanton, California, and accusations that Ellison was merely trying to destroy a competitor by driving away PeopleSoft's customers with a lengthy takeover battle. The PeopleSoft board has rejected all four offers, including the last offer of US$21 for each PeopleSoft share. \nThe Justice Department said it was reviewing the ruling and had not yet decided whether to appeal.
‘NO EQUILIBRIUM’: Taiwan’s increased defense spending is a good step, but it needs to do more to have the ability to deter aggression from China, a senior US official said The US plans to sell as many as seven major weapons systems — including mines, cruise missiles and drones — to Taiwan, four people familiar with the discussions said. Pursuing seven sales at once is a rare departure from years of precedent in which US military sales to Taiwan were spaced out and carefully calibrated to minimize tensions with Beijing. However, US President Donald Trump’s administration has this year become more aggressive with China, and the sales would land as relations between Beijing and Washington are at their lowest point in decades over accusations of spying, lingering trade tensions, disputes about the
CLOSE ENCOUNTERS: Several of the PLA fighter jets that crossed the median line of the Strait came within 68km of Hsinchu, drawing warnings from Taiwan, the ministry said At least 18 Chinese military aircraft yesterday flew into the nation’s air defense identification zone (ADIZ) on the second day of a US delegation’s visit, the Ministry of National Defense said, adding that the military responded by deploying an air defense missile system to monitor their activities. A delegation led by US Undersecretary of State for Economic Growth, Energy and the Environment Keith Krach on Thursday started a three-day visit to Taiwan. The ministry from Thursday started publicizing the actions of the Chinese People’s Liberation Army (PLA) in Taiwan’s ADIZ on its Web site and Twitter. According to ministry reports, 18 PLA aircraft
ON THEIR OWN: The KMT has decided not to participate as a party at this year’s forum, and if any members do go, they would not be representing the party, Alicia Wang said The Chinese Nationalist Party (KMT) yesterday announced that it would not send a delegation “as a political party” to this year’s Straits Forum, after a Chinese TV program described the planned visit to the annual meeting as “suing for peace.” The 12th forum is scheduled to open in Xiamen, China, on Saturday. On Tuesday last week, the KMT announced that former legislative speaker Wang Jin-pyng (王金平) would lead the party’s delegation to the forum, with KMT Secretary-General Lee Chien-lung (李乾龍) as deputy head. However, on Thursday last week, China Central Television’s (CCTV) Yangshipin (央視頻) program, hosted by Li Hong (李紅), included a headline
WORKING OVERTIME? NTU professor Lee Duu-jong denied that he had held a part-time position at a Chinese university or joined China’s Thousand Talents Program A candidate for the post of National Taiwan University of Science and Technology (NTUST) president yesterday dropped out of the race following a report questioning his links to Chinese academia and government programs. Lee Duu-jong (李篤中), a professor at National Taiwan University’s (NTU) chemical engineering department, was a member of China’s Changjiang Scholars’ Program in 2006 and was on the list of its Thousand Talents Program in 2017, a report by Chinese-language Mirror Media magazine said yesterday. The article said that Lee is suspected of having held a part-time job at the Harbin Institute of Technology in China and was the recipient