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10/25/2005
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DOJ Probing Oracle Again, This Time Over Siebel

Unlike PeopleSoft, this Justice Department investigation is unlikely to cause a long delay

Having prevailed in a clash with the U.S. Department of Justice over its purchase of PeopleSoft, Oracle is again under the DOJ's antitrust scrutiny. Oracle received a second request for information from the DOJ as part of an investigation into Oracle's proposed $5.9 billion acquisition of Siebel Systems. Siebel received a similar request.

The DOJ is considering whether the deal will give Oracle too much control over the market for customer-relationship-management software, and its request extends a 30-day waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act.

Unlike its previous antitrust skirmish, which delayed the PeopleSoft acquisition for months, Oracle appears less likely to get sidetracked here. " I don't think it's going to stop (the deal)," says Yankee Group analyst Sheryl Kingston. "It's not a hostile takeover, and there are a lot of logical reasons for Oracle to buy Siebel." The only reason that might arise, Kingstone says, is if the DOJ concludes there's too much consolidation if the overall enterprise software market, now that Oracle has bought PeopleSoft.

In a research note, UBS Investment Research analyst Heather Bellini also predicts that despite the request for information, she still expects the deal to close in early 2006.

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