IBM Pays AT&T $1.4 Billion for Sterling Commerce

Chandrasekhar Atreya
25 May, 2010
New York City

IBM agrees to acquire Sterling Commerce in a definitive agreement from AT&T for $1.4 billion in an all cash deal. The addition of this business-to-business firm to IBM

[R]IBM agrees to acquire Sterling Commerce in a definitive agreement from AT&T for $1.4 billion in an all cash deal. The addition of this business-to-business firm to IBM’s WebSphere, expands the scope of B2B.[/R]

International Business Machines Corp. agreed to acquire business-to-business services provider Sterling Commerce from AT&T Inc. for roughly $1.4 billion in one of its largest deals in nearly three years.

The deal needs approval from the shareholders and regulatory approvals as required by law.

Sterling gives IBM a presence in the business-to-business market with business integration services, supply chain software and other customer service products, as well as 18,000 clients from a wide swath of different industries.

Craig Hayman, general manager of IBM''s WebSphere business, said the ""acquisition will give IBM new tools to help clients build dynamic business networks that connect"" software across different servers. ""In addition, the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers."" Cloud computing is a fast-growing segment of the software industry in which applications can be accessed online as opposed to company-specific systems.

Sterling has about 2,500 employees will be integrated into IBM''s WebSphere unit. The purchase is set to close in the second half of the year.

The Sterling Commerce technology architecture is aligned with IBM''s strategic direction, and is ahead of most ISV partners in its support of IBM platforms. Sterling Commerce has achieved certification status in IBM''s SOA program.

The Sterling Commerce architecture features, Standards based, Net-native service oriented architecture compatible with Java - J2EE, Native XML, SOAP, WSDL.

AT&T expects to record a $750 million pre-tax gain on the deal. IBM shares rose slightly to $125.44 in early trading, while AT&T shares fell 1.7% to $24.42.