IBM acquires Sterling Commerce

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Armonk, N.Y. IBM and AT&T announced they have entered into a definitive agreement for IBM to acquire Sterling Commerce from AT&T for approximately $1.4 billion in cash.

The acquisition of the Dublin, Ohio-based Sterling will expand IBM's ability to help organizations create more intelligent and dynamic business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers both on-premise or through cloud-computing delivery models.

Currently, more than 18,000 global customers use Sterling Commerce offerings. The company enables more than 1 billion business interactions a year for clients in the financial services, retail, manufacturing, communications and distribution industries.

IBM sees these interactions growing dramatically due to the proliferation of electronic business transactions, from banks exchanging transaction data and manufacturers sourcing raw materials electronically, to retailers automating stock replenishment and managing orders online. Such intelligent transactions, and the software that supports them, help deliver the agility businesses need to be successful.

Sterling Commerce offerings strongly complement IBM's middleware portfolio. By acquiring Sterling Commerce technology and its large trading partner network, IBM anticipates it will be able to deliver powerful new cross-channel solutions to its clients. In addition, Sterling Commerce technology will complement IBM’s industry-focused software offerings, enabling the addition of capabilities to IBM’s frameworks supporting the retail, manufacturing, communications, healthcare and banking industries.

“This acquisition will give IBM new tools to help clients build dynamic business networks that connect partners, suppliers and clients and deliver a consistent customer experience across channels,” said Craig Hayman, general manager, WebSphere, IBM. “In addition, the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers.”

According to IBM, the combined technologies and expertise of IBM and Sterling Commerce will make business and partner networks smarter and more efficient by enabling integration beyond the enterprise. The company believes that through this acquisition, clients will be able to extend the capabilities of their existing systems using, for example, IBM’s rules management, analytics and business process management software. This can enable these organizations to respond more nimbly to sudden business challenges as they happen.

Following the close of the acquisition, approximately 2,500 Sterling Commerce employees will be integrated into the WebSphere organization within IBM’s Software Group.

IBM and AT&T expect the transaction to close in the second half of 2010, subject to regulatory approvals and the satisfaction of other customary closing conditions.