Largest software merger hits $15 billion

Merger frenzy continues as i2 buys Aspect Development to boost B2B contentThe mergers and acquisitions propelled by the business-to-business e-commerce boom just keep getting bigger with i2 Technologies, a provider of e-marketplace portal and execution software, snatching up Aspect Development in a $15 billion ($US9.3 billion) stock-for-stock agreement that is being touted as the largest software merger in history.i2 has also recently acquired Supplybase, maker of Web-based product design and sourcing of custom parts and assemblies.

The agreement will combine content and analysis with transaction capabilities, according to officials from the vendors.

Pierre Mitchell, an analyst with US-based AMR Research, echoed their sentiments, saying that by acquiring and then integrating content-oriented offerings, i2 is providing end users with much-needed content.

"i2's acquisition of Aspect has filled in the content hole of how you're going to do strategic sourcing," Mitchell said.

With the content support, i2 now has the strongest strategic sourcing solution out there, he said. The question now becomes whether i2 can integrate the product lines, though the prospect of that is good, Mitchell said. He also noted the two companies have worked together before.

"It's going to take some time, but I think the integration should be relatively straightforward," he said. i2's competitors should look at this "as a disconcerting move", Mitchell said, citing the combination of content and transaction support.

The i2 acquisitions will allow the company to meet end users' expectations of more advanced content solutions that include supplier analysis, commodity rationalisation, part rationalisation, supplier management, and design optimisation, he said.

For the Aspect merger, i2 will issue or reserve for issuance about 44.9 million shares of i2 common stock. The total value of the transaction is about $US9.3 billion, i2 officials said.

Aspect is slated to become a subsidiary of i2, with Romesh Wadhwani, Aspect chairman and CEO, taking the helm as vice chairman of i2 and a member of i2's board of directors.

In the Supplybase acquisition, the agreement specifies that i2 will issue or reserve for issuance about 1.8 million shares of i2 common stock, valued at close to $US380 million, for all of the outstanding stock and stock options of Supplybase, i2 officials said.

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