IBM buying up Cognos

Canada's largest software company, Cognos Inc., said Monday it has agreed to a $5-billion US friendly takeover by IBM.

Canada's largest software company, CognosInc., said Monday it has agreed to a $5-billion US friendly takeover by IBM.

The U.S. computing giant will pay $58 US per share in cash for Cognos.

The offer includes a premium of more than $5 US over the $52.98 US closing price of Cognos shares last week.

Investors responded by sending Cognos shares up almost 8 per cent to $57.15 USon Nasdaq, and up more than 10 per cent to $55.35 on the TSX.

Based in Ottawa, Cognos produces business software and employs about 4,000 people around the world.

"We chose Cognos because of its industry-leading technology that is based on open standards," said Steve Mills, senior vice-president in IBM's software group.

"IBM is a perfect complement to our strategy, with minimal overlap in product," said Rob Ashe, the president and CEO of Cognos.

Speculation of a takeover of Cognos increased after its larger rival, Business Objects, agreed to be acquired by SAP, the German software giant, for nearly $7 billion US over Thanksgiving weekend.

In March, Oracle bought another Cognos competitor, Hyperion Solutions Corp., for $3.3 billion US.

Analysts had pegged IBM, Microsoft and Oracle as possible buyers of Cognos.