The bidding war for retail automation software supplier Retek ended yesterday, with Oracle scooping up the Minnesota firm from larger rival SAP with a US$631 million cash offer. Oracle and Retek said they had signed a merger agreement at a price of US$11.25 a share for all outstanding Retek stock. German software giant SAP dropped out of the bidding after making its highest and final offer of US$11 a share last Thursday. Oracle topped the company's bid on the same day. Oracle's conquest of Retek is likely to be remembered as a brief skirmish compared with its acrimonious, 18-month battle to buy rival PeopleSoft. The PeopleSoft saga ended last December with Oracle agreeing to a US$10.3 billion merger with the company. 'Oracle has the largest applications business in North America, and we intend to expand that leadership position,' Oracle chief executive Larry Ellison said. 'Combining Oracle with Retek is an important step in that direction, and it strengthens our position in the retail applications market globally.' About 80 per cent of Retek's customers run on California-based Oracle's database and other business-automation software. The companies have worked together since Retek was founded in 1986. 'We believe that Oracle's offer is a good deal for Retek stockholders, and all directors in attendance at our board meeting have recommended that it be accepted,' said Retek president and chief executive Marty Leestma. 'We will work with Oracle over the next several weeks to ensure that the integration is not disruptive for our clients and employees.' By accepting Oracle's offer, Retek is expected to indemnify SAP for its trouble. Under an amended deal signed on March 17 for their proposed merger, SAP and Retek agreed to a US$25 million termination fee. A recent report from research firm Gartner said the Oracle acquisition was good news for Retek 'because if SAP became the acquirer, Retek customers would likely be forced to migrate quickly, while Oracle isn't likely to force customers to migrate until at least 2008'. Oracle's latest acquisition would also provide it with new selling opportunities to Retek's worldwide customer base, which is more than 200 strong and includes such prominent retailers as Tesco, Best Buy, Gap, Sainsbury's, Selfridges, Fnac, Lancome and Giorgio Armani. Forrester Research said: 'With very little product overlap, Oracle could upsell applications and platform technology to the common client base. 'An integrated retail solution that includes human resources, financial systems and merchandising tools would help Oracle quickly become the vendor of choice for retailers.' Arics Poon, managing director of Oracle's South China and Hong Kong operations, said the Retek acquisition would expand the company's reach in Asia's fast-developing retail markets. 'Retail is one of the key industries showing strong growth momentum in the region,' said Mr Poon, citing fresh opportunities on the mainland.