SAP eyes e-commerce vendor Ariba

German enterprise software maker, SAP, says it will acquire cloud-based e-commerce vendor Ariba for about $4.3 billion in a deal that will significantly expand SAP's cloud offerings, The Wall Street Journal reveals.

SAP will acquire Ariba for $45 a share. The deal is expected to close in the third quarter. Ariba's board has unanimously approved the deal and its shares were halted in recent trading.

SAP says the acquisition of Ariba will create new models for business-to-business collaboration in the cloud, and positions SAP in a fast-growing segment as demand for cloud-based services increases.

Ariba, which uses technology with a Web-based trading community to help companies collaborate with a global network of partners in a cloud-based environment, had $444 million in total revenue in 2011.

When the deal closes, SAP will “consolidate all cloud-related supplier assets” under the auspices of Ariba, which will operate as an independent subsidiary, Computerworld says.

Its CEO, Bob Calderoni, will be nominated to SAP's global managing board. Those plans suggest that SAP is eager to make Ariba's substantial user base, which has other options for business-to-business commerce platforms, feel secure in their investments.

Ariba's network will grow to more than one million companies this year, SAP co-CEO Bill McDermott said during a conference call with media and analysts.

SAP plans to keep Ariba's system open to other platforms, allowing customers to tap it from “any source system”, according to McDermott, CIO writes.

“All those companies that are not using SAP need not worry,” he said.

Ariba's trading network and procurement applications would also complement SAP's cloud-based enterprise resource planning suite Business ByDesign, as well as the Business One application for smaller companies, McDermott said.