SAP-SuccessFactors deal delayed as US regulators conduct investigation

The Committee on Foreign Investment in the U.S. is probing the US$3.4 billion deal

SAP's US$3.4 billion purchase of cloud software vendor SuccessFactors has been delayed indefinitely while a U.S. regulatory body investigates the deal, an SAP spokesman confirmed Wednesday.

On Wednesday, SAP announced for the third time it was extending its offer for SuccessFactors, which was first made in December, while awaiting approval from the Committee on Foreign Investment in the U.S. (CFIUS).

The CFIUS first conducts an initial review of mergers that can take up to 30 calendar days. After that period, the committee can conduct a formal investigation lasting up to 45 calendar days. That investigation has begun and the CFIUS has until March 5 to complete it, SAP spokesman James Dever said Wednesday.

"We're working with CFIUS and hopeful we can conclude this process quickly," Dever said. "We look forward to closing the transaction in the first quarter."

Dever said he knew of nothing going awry with the merger, and pointed to SAP's acquisition of Business Objects several years ago, which saw a similar delay while awaiting regulatory approval.

A U.S. Treasury spokesperson said via email that the department does not comment on specific CFIUS cases, as information filed with the committee cannot be disclosed to the public.

The CFIUS conducted investigations on 35 of the 93 transactions it reviewed in 2010, according to the committee's annual report to Congress for that year, which was released in December. But the president made no actions to "block or prohibit" any of the mergers, according to the report.

SAP is buying SuccessFactors for its array of widely used human resources software, as well as expertise in the cloud computing market.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com

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