SAP said on Wednesday that it plans to buy Sybase in an all-cash deal valued at about $5.8 billion.
The German software maker said it will pay $65 a share, a 44 percent premium to the average trading price of Sybase over the past three months. The board of Dublin, Calif.-based Sybase has unanimously approved the deal, but the deal still requires regulatory and shareholder approval.
"With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world's best business software with the world's most powerful mobile infrastructure platform," co-CEO Bill McDermott said in a statement.
SAP said it will "continue to support each organization's product road map" and keep both firms' development organizations intact. Sybase will operate as a standalone unit under the name "Sybase, an SAP Company." Sybase's management team will continue to run the business
The deal is expected to close in the third quarter and would immediately add to SAP's earnings, the companies said.
Word of the talks between the companies had leaked out ahead of the formal announcement.