European Union antitrust regulators cleared Oracle Corp.'s hostile $7.7 billion bid for rival business software maker PeopleSoft Inc. on Tuesday, removing one of the last major hurdles in the contested takeover fight.
No conditions were placed on the decision, which came after a year-long E.U. investigation that halted several times and similar scrutiny in the United States.
"There is an absence of sufficient evidence of competitive harm," the European Commission said in a statement.
The decision by the European Commission, which initially opposed the deal, comes a few weeks after the U.S. Department of Justice dropped its challenge to the combination of the business software makers.
PeopleSoft said its board, which has "unanimously rejected each of Oracle's offers," would review the implications of the E.U. decision.
A U.S. judge had ruled that Washington was wrong to argue that Oracle's proposed takeover of PeopleSoft would damage competition in a software market for "large, complex enterprises."
Critics argued that the deal would reduce the number of large companies specializing in business enterprise software from three to two, although Germany's SAP AG would retain its No. 1 ranking.
But the commission said it found that large multinationals that use such software "have other suppliers to serve their needs beside Oracle, PeopleSoft and SAP." Thus, "the markets would remain competitive," it said.
The commission said it closely cooperated with U.S. regulators in its investigation and took into account evidence from a trial in California.
Oracle is fighting in a Delaware court now to invalidate PeopleSoft's anti-takeover defenses. Oracle has indicated it would fire more than half of PeopleSoft's 11,500 employees if its takeover effort succeeds.
Oracle, based in Redwood Shores, Calif., launched its hostile bid for PeopleSoft, of Pleasanton, Calif., in June 2003. Last week, Oracle extended to Nov. 5 its tender offer of $21 per share.
Oracle shares closed up 14 cents, or 1.2 percent, at $12.27. PeopleSoft shares finished up 33 cents, or about 1.7 percent, at $20.09 in trading Tuesday on the Nasdaq Stock Market.