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SAP set to bid for Amdocs?

17th Aug 2004
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Rumours are circulating in Israel that SAP may be about to make a bid for Amdocs in the wake of its previous acquisition of Israeli-American firm A2i.

Amdocs has been rumoured to be in play for some time, but the latest SAP-specific chatter seems to have been inspired by a recent visit by a visit by Shai Agassi of SAP’s executive boardto Israel during which time he met with former Amdocs management.

Both companies deny any formal talks, but sources in Israel insist that informal feelers have been made. "We do not respond to reports on future acquisitions, whether they are true or not", Agassi was quoted as saying in the Israeli press.

The two companies are enjoying opposing fortunes at the moment. SAP’s second-quarter net profits leaped by 14 per cent to $305 million on a 15 per cent increase in sales to $610 million. In contrast, despite an increase in third-quarter revenues, Amdoc’s share price has seen a 30 per cent decline over the past three months.

SAP has something of a track record in buying up Israeli software firms. In 2002, it bought Israeli companies GUIMachine and Expression Solutions for $1 million each, before this year paying $10 million for A2i.

But SAP might face competition if IBM’s analysis of the market is to be believed. According to an internal IBM report, Amdocs potential suitors also include Hewlett Packard and Microsoft.

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