IBM opens ILOG tender offer

15 October 2008

IBM commenced a $340 million cash tender offer to acquire French software maker ILOG, which the company hopes to leverage to boost its presence in the lucrative business process management (BPM) market.

IBM's subsidiary Citloi SAS is offering €10 or $13.70 for each ILOG share in France and its American depositary shares held in the US. Both offers are expected to end on 17 November.

BPM software is used in planning, monitoring and analysis of business processes such as billing, distribution and marketing. It is seen as a way for companies to streamline internal systems and improve customer service.

BPM is a great prospect for companies trying to stretch their dollars as the economic downturn tightens tech spending worldwide. In their endeavour to wring as much value as possible out of their existing IT hardware, IT research firm IDC has estimated that the BPM market is growing at around 44 per cent per annum, and could be valued at $5.5 billion by 2011.

IBM's ILOG acquisition has been cleared as per the Hart-Scott-Rodino Antitrust Improvement Act of US and authorised by the French Minister of Economy. It is subject to European antitrust regulations and to the condition of expiry of the offers.

In a statement, ILOG said that through the proposed transaction, IBM aims to combine its business process management (BPM), business optimisation, and service oriented architecture (SOA) technologies with ILOG's Business Rules Management Systems software.