SAP chief sees no takers for software rival Salesforce

By Harro Ten Wolde

MANNHEIM, Germany (Reuters) - German software company SAP's chief executive once again ruled out any move to acquire Salesforce.com, then went further by saying that its richly valued rival is unlikely to be acquired by any other player in the industry.

Microsoft, Oracle, IBM and SAP have all been touted as potential buyers of Salesforce, which last month said it had been contacted by an unnamed suitor about a potential takeover and that it had hired financial advisers.

Established players in the industry are all looking to boost Internet-based delivery of their business software products to fend off competition from pure cloud-based rivals, a market Salesforce pioneered and where it remains category leader.

But SAP Chief Executive Bill McDermott remains adamant that his company is not interested and told reporters that Salesforce's core customer relationship management (CRM) products have become commoditised and are now widely available from SAP and other software providers.

Asked how a Salesforce acquisition by an SAP competitor would affect his company, McDermott said he does not expect any move by the likes of Microsoft and IBM.

"I do not expect that to be the case because of the valuation of the company (Salesforce)," McDermott said on Wednesday, ahead of SAP's annual shareholder meeting.

Asked whether anyone else in the industry would buy Salesforce, McDermott responded, flatly: "No."

Salesforce has a market value of about $46.9 billion, less than half of SAP's 86.1 billion euros ($95.5 billion), and analysts have speculated that a takeover premium could lift the value of a potential deal to $60 billion-plus.

Pressed on the possibility of arch-rival Oracle buying Salesforce, McDermott said: "It is probably better than any (other) scenario for SAP because it will add more disruption to a commodity business."

The integration required to justify an Oracle-Salesforce deal would force Salesforce customers to reconsider their future options and give SAP a big sales opportunity, McDermott said.

Salesforce is set to report its first-quarter results after the close of U.S. trading later on Wednesday. The company is expected to report a narrower loss of 3 cents per share, including the impact of stock option expenses, down from a loss of 16 cents per share in the same period last year, according to Thomson Reuters data.

(Additional reporting by Eric Auchard and Ilona Wissenbach; Editing by David Goodman)