FILED BY ORACLE CORPORATION
PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933
AND DEEMED FILED PURSUANT TO RULE 14a-12
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SUBJECT COMPANY: SIEBEL SYSTEMS, INC.
COMMISSION FILE NO. 0-20725
Oracle and Siebel Systems
Acquisition Announcement –
Oracle Investor Presentation
September 12, 2005
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Disclaimer
Important Information
This document may be deemed to be solicitation material in respect of the proposed business combination of Oracle and Siebel. In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. STOCKHOLDERS OF SIEBEL ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED BUSINESS COMBINATION. The final proxy statement/prospectus will be mailed to stockholders of Siebel. Investors and security holders will be able to obtain the documents free of charge at the SEC’s website, www.sec.gov, from Oracle Corporation, 500 Oracle Parkway, Redwood Shores, California, Attention: Investor Relations, or from Siebel Systems, Inc., 2207 Bridgepointe Parkway, San Mateo, California 94404, Attention: Investor Relations.
Oracle, Siebel and their respective directors and executive officers and other members of management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed transactions. Information regarding Oracle’s directors and executive officers is available in Oracle’s proxy statement for its 2005 annual meeting of shareholders, which was filed with the SEC on August 30, 2005, and information regarding Siebel’s directors and executive officers is available in Siebel’s proxy statement for its 2005 annual meeting of stockholders, which was filed with the SEC on April 29, 2005. Additional information regarding the interests of such potential participants will be included in the proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements
This document contains certain forward-looking statements about Oracle and Siebel. When used in this document, the words “anticipates”, “may”, “can”, “believes”, “expects”, “projects”, “intends”, “likely”, similar expressions and any other statements that are not historical facts, in each case as they relate to Oracle and Siebel, the management of either such company or the transaction are intended to identify those assertions as forward-looking statements. In making any such statements, the person making them believes that its expectations are based on reasonable assumptions. However, any such statement may be influenced by factors that could cause actual outcomes and results to be materially different from those projected or anticipated. These forward-looking statements are subject to numerous risks and uncertainties. There are various important factors that could cause actual results to differ materially from those in any such forward-looking statements, many of which are beyond the control of Oracle and Siebel, including: the impact of general economic conditions in regions in which either such company currently does business, industry conditions, including competition, fluctuations in exchange rates and currency values, capital expenditure requirements, legislative or regulatory requirements, changes in the tax laws, interest rates and access to capital markets. The actual results or performance by Oracle or Siebel could differ materially from those expressed in, or implied by, these forward-looking statements. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Oracle or Siebel.
This document is for informational purposes only and may not be incorporated into a contract.
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Agenda
Transaction Summary
Transaction Rationale
Combined Customer Benefits and Product Footprint
Oracle’s Consolidation and Integration Strategy
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Transaction Summary
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Transaction Summary
Oracle acquires Siebel Systems and becomes #1 in CRM
Oracle is acquiring Siebel, the leading provider of customer-facing enterprise applications $10.66 per share $5.85Bn fully-diluted equity value $3.61Bn net of Siebel cash (1)
Transaction expected to close in early 2006, subject to Siebel shareholder vote, regulatory approvals, and customary closing conditions
No Oracle shareholder vote required
Combining complementary best-in-class CRM capabilities of Siebel with best-in-class Oracle ERP, middleware and database to provide customers with a complete set of information age software
Joint customers have been asking for this in order to maximize their considerable investments in both companies’ products
Project Fusion is well into development, and the timely incorporation of Siebel’s features and functionality will complement and enhance those efforts
(1) Siebel net cash of $2.24Bn as of 6/30/05.
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Overview of Transaction Structure
$10.66 in cash or Oracle stock per Siebel share
Siebel shareholders can elect cash or stock with the stock portion capped at 30% of total consideration Number of Oracle shares issued will float based on Oracle’s share price such that Siebel shareholders receive a fixed value of $10.66 per share If Oracle’s stock price declines below $10.72, Oracle will issue a fixed number of shares (0.994 shares for each Siebel share) to those electing stock
In this scenario, Siebel shareholders will receive a fixed value less than $10.66 per share if electing stock
The measurement period for Oracle’s average share price will be the 10 trading days ending the day prior to close Oracle will have the right to choose an election date during the 20 trading days ending two days prior to close
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Siebel Will Be Accretive to our Earnings
Accretive to non-GAAP operations in first full fiscal year (FY’07)
$ 0.02-$0.03 accretive to FY2007 EPS on a non-GAAP basis
Up to 30% of the consideration may be in stock, but Oracle intends to repurchase stock equal to the shares issued in the transaction
Modestly dilutive on a GAAP basis
The acquisition of Siebel will provide compelling financial returns for Oracle shareholders
Siebel transaction investment returns will exceed Oracle’s hurdle rates
Siebel will contribute to Oracle’s long-term 20% annual earnings growth target
Once integrated, Siebel’s incremental contribution should exceed Oracle’s current EBIT margins
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Funding the Transaction
Total net cash requirements: $2.6Bn - $4.3Bn, depending on stock election
Funded through Oracle cash balance and borrowings
Borrowings could be paid off within a year given historical cash flow generation
Oracle generated cash flow from operations of $3.5Bn in FY2005
Forecasted Oracle Liquidity Anticipated at Close (3QFY06)
Net Cash Required for Siebel and Oracle Stock Repurchase
Oracle Anticipated Liquidity Post-Close (3QFY06)
~$ 5–6Bn
$0.15Bn $0Bn
Cash & Cash Equiv.1
LT Debt
PSFT Related Debt $4.3Bn
Net Cash Required for Siebel and Oracle Stock Repurchase2
~$ 4Bn
Cash & Cash Equiv.3
$0.15Bn
LT Debt
~$ 3Bn
Siebel Related Borrowings
(1) Potential range of cash balances for Oracle at anticipated closing in 3QFY06 based on current Wall Street estimates. (2) Net of Siebel cash of $2.24Bn at 6/30/05 and includes estimated transaction fees, expenses and one-time costs. (3) Preliminary estimate, assumes approximately $1.5Bn of Oracle balance sheet cash used to fund acquisition.
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Transaction Rationale
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CRM is the Largest Segment of the Packaged Apps Business …
2003 Enterprise Application Software License Revenue
Total License Revenue = $10.6Bn*
CRM $3.4Bn
Financial Management $2.3Bn
Supply Chain Management $2.0Bn
Human Capital $1.3Bn
Asset Management $0.3Bn
Manufacturing $1.3Bn
32%
22%
19%
12%
3%
12%
*Source: Gartner, November 2004. Represents license revenue only, excludes maintenance revenue.
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… and CRM is Projected to Keep Growing
Worldwide CRM Market Growth Estimates ** CRM Functional Segmentation (2004)
License Revenue ($MM) 2004 Total = $3.5Bn
2005 - 2008 CAGR: 8.8%
5 – Customer Support
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$4,353 and Service $4,012 $1.5Bn $3,715 $3,386 $3,505
Sales 42% $1.5Bn
41%
17%
Marketing $0.6Bn
2003 2004 2005 2006 2007 2008
*Source: Gartner, November 2004. Represents license revenue only, excludes maintenance revenue.
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CRM Opportunity Remains Significant
Current Deployments of Customer Management Software of
60% 54%
50%
36% 40% 31%
30% 20% 10%
0%
Packaged In-House Ad Hoc Desktop
Q. What types of customer management software do you currently use? (n=211)
Source: AMR Research, 2005.
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… but Customers are Driving Consolidation
Oracle’s strategic importance increases with acquisition of Siebel
50% of customers are looking to50% of are to reduce the number of IT vendors they the of IT they do business with do with
74% of customers indicated they are likely to reduce74% of they are likely to the number of applications software vendors they dothe of they do business with with
50%
74%
43%
50%
32%
24%
20% 18% 7%
Looking to Reduce Number of Vendors
Comfortable with the Number of Vendors
Looking to Expand the Number of Vendors
Applications Software Vendors
Infrastructure Software Vendors
Service Vendors
Netowrking Vendors
PC Vendors
Systems Vendors
Source: Based on survey results from Goldman Sachs Global Investment Research – May 12, 2005.
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Acquisition Will Enable Oracle to Sell More Products and Technology
Vaults Oracle from the middle of the pack to the lead in CRM
Best-in-class Siebel CRM becomes a strong reason for customers to choose Oracle enterprise applications solutions
Maximum deployment options with growing Siebel hosted CRM offering
Complementary solutions and customer bases provide cross-sell and up-sell opportunities
Database, middleware, business intelligence
Customer data hub
Retek/ProfitLogic and i-flex solutions
Acquisition adds significant customer references and industry expertise in customer centric applications
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Oracle Becomes More Important Strategic Partner for More Customers
Customers seeking to lower costs and complexity with a smaller number of strategic IT vendors
Oracle is already a strategic ERP, middleware and database vendor
Customer-facing CRM solutions help Oracle become a more important strategic solutions provider
Combined companies can accelerate delivery of innovative CRM applications with a larger R&D budget
Tightly integrated with Oracle’s applications and infrastructure
Amplified by Oracle’s commitment to deployment flexibility, whether on premise, hosted, or hybrid models
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Oracle Becomes More Important Strategic Partner for More Partners
Acquisition strengthens relationships with many key partners that help drive Oracle revenue
Partners influence customer decisions on applications purchases
Affects all parts of Oracle’s business by having a critical number of partners as our champions
Reinforces our importance to systems integrators
Combination will result in Oracle being the largest CRM practice at many firms
Solidifies and grows relationships with IBM, Accenture, Capgemini, Deloitte, BearingPoint, and other SIs
More opportunities for each partner, allowing them to further invest in the Oracle ecosystem
Build complementary software skills and best practices
Many of the most influential partners are also Siebel’s largest customers
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Oracle / Siebel Combination Will Be More Successful than Siebel Alone
Oracle will realize substantial, immediate cost reductions given our existing CRM investment Oracle and Siebel has more scale and scope combined and lower costs
260,000 customers; 24x7 global support network; 13,100 developers
Significantly broader and deeper product offering
Oracle will provide a product roadmap for CRM that will bolster customers’ confidence to invest
Resolves concerns regarding Siebel’s viability
Siebel can leverage Oracle’s leading middleware offering at a time when architectural changes (like SOA) dictate seamlessness with middleware Oracle and Siebel together can more effectively compete versus SAP, Microsoft, salesforce.com, Amdocs, RightNow, and others
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Oracle Becomes Leading Customer Centric Software Provider
Siebel’s best-in-class CRM + Oracle’s best-in-class ERP + Oracle’s best-in-class Fusion middleware + Oracle’s best-in-class 10g database technology = Single best solution for customer centric enterprises
Siebel Systems
Most live CRM users – 3.4mm
Over 4,000 world class customers
Largest enterprise CRM deployments
Proven return on investment
Best practices and implementation experience
5,000 employees located in 80 offices in 33 countries
Revenue of $1.3Bn(1)
(1) Based on last fiscal year income statements.
Oracle
360° real-time view of the customer from sales to services to fulfillment to the shop room floor
Domain expertise to aggregate, cleanse and normalize customer data
Industry expertise in key verticals
50,000 employees servicing 260,000 customers across 190 countries
24x7 global support
13,100 software developers and $1.5Bn R&D budget (1)
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The Result: More of Everything …
Oracle can capture a larger share of CRM growth
Growing both license and maintenance
Oracle can up-sell and cross-sell joint installed base with a broader product offering
More apps, more database, more middleware
Oracle can better retain Siebel customers
Broader product offering delivered by a more strategic vendor and solutions provider
Oracle can increase customer satisfaction and increase maintenance renewals
Much larger 24x7 global support infrastructure
Oracle and Siebel combined will achieve economies of scale and offer customers increased functionality at lower TCO
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… And Oracle Becomes Leading Enterprise Vendor
Oracle “stack” is more compelling
Consulting Services
Applications
Development Tools
Middleware Suite
Database
Operating System
Oracle Consulting
Project Fusion Applications
Oracle Tools / J2EE
Fusion Middleware
Database 10g
Linux/Unix/Windows
IBM GlobalServices
3rd Party ISVs
Rational / WebSphere
WebSphere DB2 Linux/Unix/Windows
SAP Consulting
mySAP
NetWeaver / ABAP
NetWeaver
Oracle, DB2, MySQL, MS SQL Server
Linux/Unix/Windows
3rd Party SIs
Microsoft Business Solutions
Visual Studio .NET
.NET MS SQL Server Windows
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Combined Customer Benefits and Product Footprint
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Siebel Systems Customer Benefits
Investments in Siebel applications will be supported and protected as the centerpiece of Oracle’s Fusion CRM strategy
Stronger combined vendor with complementary products attributes
Removes concerns about Siebel’s future
Products designed to work with Oracle’s software
Accelerate delivery of innovative CRM applications with larger R&D budget
Continue support for Siebel’s CRM and analytics solutions
Provide seamless continuity for customers
Maintain support for heterogeneous databases
Commitment to deployment flexibility, including Siebel CRM OnDemand Enhanced support and services through scale Extended partner ecosystem with increased investment
Support and broaden relationships with Siebel’s business partners
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Oracle Customer Benefits
The proposed transaction underscores Oracle’s commitment to customer-facing solutions
Siebel CRM will be integrated with Oracle’s applications and infrastructure
Siebel will continue to be available today and will serve as the centerpiece of Oracle’s Fusion CRM strategy
Siebel CRM provides proven ROI and 98% product loyalty(1)
Siebel will represent the base set of features and functionality for the next generation of Fusion CRM applications
Access to industry best practices and implementation expertise based on the large number of Siebel deployments Customers of Oracle/PeopleSoft/JD Edwards CRM applications will continue to receive enhancements and support
Products will continue to evolve with new functionality over time
Incorporation of Siebel’s features and functionality will help customers extend the value of their existing CRM investments
(1) Siebel Systems customer survey, Satmetrix Systems, Q3 CY 2005.
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Dawn of Real Information Age Applications
Combination will offer a compelling set of modern, information age applications
Legacy Applications
(‘80s and ‘90s; Driven by Y2K)
Proprietary and closed
Information silos fragment data and tasks
ERP-focused
Designed for process automation and process clerks
Antiquated technology designed for data entry, not data access
Information Age Applications
(Modern; Driven by Customer Centricity)
Standards driven
Information driven
Industry driven
Designed for intelligent, real-time proactive decision making
Built on a modern and open service oriented architecture
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Product Evolution for All Customers
Combination ensures support and protection for the significant investments customers have made
We plan to continue to release product enhancements and support for Oracle and Siebel Systems CRM products Plans include a migration for existing CRM customers to Fusion CRM applications, which will incorporate Siebel CRM as the base set of features and functionality
New Functionality Product Enhancements Product Support
New Functionality Product Enhancements Product Support
New Functionality Product Enhancements Product Support
New Functionality Product Enhancements Product Support
PROJECT FUSION
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Convergence of Oracle and Siebel Applications
Manufacturing BI CRM Analytics Financials
HR CRM
SCM Customer Data Collab Suite OnDemand Integration iAS Project Mgmt Data Hub Procurement 10g
Complete set of modular, information age applications Tailored for the needs of over 20 specific industries
CRM
Manufacturing
Customer Data SCM
Integration Procurement iAS
PROJECT Analytics OnDemand Data Hub
FUSION HR
BI Middleware Enterprise Manager
10g
Financials
Collab Suite
Project Mgmt
Media &
Entertainment
Others…
Public Sector
Consumer Goods
Communications
Retail
Healthcare
Energy
Transportation
Life Sciences
High Tech
Manufacturing
Financial Services
Travel & Hospitality
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Siebel’s Customer-Architected Solutions
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Select Joint Applications Customers
Siebel’s product capabilities are tailored for the needs of over 20 industries Customer commonality speeds time to benefit
Communications Financial Life Sciences High Technology Insurance & & Media Services Healthcare
Travel, Transport Consumer Manufacturing Retail Automotive & Hospitality Goods
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Largest Siebel Deployments
Company Users Company Users
66,300 63,800 41,000 40,600 40,500 30,300
30,000 25,100 25,000 24,700 23,800 22,700
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Oracle’s Consolidation and Integration Strategy
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Consolidation Provides Compelling Benefits for Customers
Oracle has been pursuing a consolidation strategy in order to maximize customer revenue and drive shareholder value
Accelerated innovation from larger R&D investments with less redundant efforts Enhanced product solutions with broader, more modular and flexible business functionality Reduced TCO through improved software integration Decreased complexity in the sourcing, implementation and ongoing maintenance of software Consolidated customer support across multiple products with increased vendor accountability
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Clearly Defined Acquisition Criteria Speeds Time to Benefit
Acquisition Criteria
Deliver Enhanced Solutions for Customers
Complementary Products and Technology
Close Alignment With Oracle Vision
Significant Number of Common Customers
Ability to Integrate in Six Months
Financial Return Criteria
Oracle Strategic Benefits
Combine products and solutions in a seamless way
Increase rate of product investment on a combined basis
Leverage Oracle technologies to provide a more seamless customer experience
Critical expertise / functionality in industries or product segments
Provide platform extension or enhancement
Acquired products built using open standards and Java
Shared vision and corporate philosophy
Drive cross-sell and up-sell
Consolidate quickly to provide a single face to customers
Utilize Oracle operations infrastructure immediately
Accretive in 12-18 months
Contribute to 20%+ annual earnings growth target over next 5 years
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Integration Plan for Siebel Consistent with Previous Experiences
Five integration focus areas with repeatable objectives
Customers Employees Products Legal Entities
Operational Infrastructure
Focus on 100% customer satisfaction
Ensure smooth transition for customers without interruption Over-communicate with customers throughout the integration
Restructure quickly – retain the best-of-the-best Objectively select individuals to run key organizations Minimize dependence on contractors and third parties
Align product strategies with existing Oracle direction Ensure commitment to open standards
Continue release schedule, while integrating with Oracle products
Consolidate quickly to provide single face to customers Prioritize legal entity mergers to drive rationalization Coordinate contracting and other business practices
Align corporate policies and procedures starting on “Day 1” Leverage Oracle infrastructure quickly Standardize and globalize processes on Oracle single instance
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Summary of Recent Integrations
Oracle’s rigorous and repeatable integration strategy means each of our recent acquisitions is fully integrated or close to completion
Q3 FY’05 Q4 FY’05 Q1 FY’06
PeopleSoft Retek Oblix TimesTen ProfitLogic
Merger Announcement Date 12/13/2004 3/8/2005 3/28/2005 6/9/2005 7/5/2005
Equity Purchase Price $11.1bn $665.0mm not disclosed not disclosed not disclosed
Acquired # of:
Customers 12,900 230 200 126 27 Employees 11,075 525 111 87 219 Products 300 28 8 3 3 Legal Entities 79 14 3 2 4
Integration Statistics:
Employee Offer Acceptance Rate 94% 90% 100% 97% 99% Legal Entity Merger Completion 100% 100% 100% 100% 66% Facility Consolidation Completion (1) 100% 74% 100% 0% 65% IT Migration Completion 75% 50% 100% 66% 50%
Note: Excludes asset acquisitions of Triplehop and Context Media.
(1) TimesTen facility consolidation includes only one facility, the company’s former HQ, which will be completed at the end of September.
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Demonstrated Customer Support for Oracle’s Integrated Applications
Various customer surveys confirm the high customer satisfaction levels with Oracle’s vision, strategy and support post-acquisition Prudential Equity interviewed 15 PSFT/JDE customers (1)
A majority are happy and plan to stick with Oracle
? Over 90% are or will be moving forward with PSFT/JDE upgrades
? Only one customer has indicated they may switch in next 12 months
87% have met with an Oracle representative post-merger
Customers giving Oracle the opportunity to deliver on Project Fusion
“I believe that extending support for and offering live technical sessions as part of MetaLink is yet another sign that [Oracle officials] are committed to their customer base. [Oracle] is clearly making significant strides to continue to support, sustain and educate their customers.”
John Matelski, Deputy CIO, City of Orlando Computerworld, May 5, 2005
(1) Prudential Equity Group, LLC, June 21, 2005.
“When we heard about the merger, we were very concerned, given all the rhetoric and noise in the press,” he acknowledges. “After all, we’d spent a lot of money.” The Oracle road map has eased those concerns, says Miller. “I’ve been told they’ll support my [PeopleSoft] applications and databases for the next decade and that I won’t be forced to make any major changes, which gives me comfort,” he adds. “We’re optimistic.”
Laird Miller, CFO, London Drugs Ltd. CFO, April 1, 2005
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Demonstrated Customer Support for Oracle’s Integrated Applications (Cont’d)
“The combined companies will be in a better competitive position. The added stability means I can plan more confidently. I’m pleased that my business-critical applications have the resources of a larger company behind them.”
Norm Fjeldheim, CIO, Qualcomm
“I am confident that Oracle will be able to use its combined size and intelligence to develop and deliver a better solution than anyone has today. I do expect this to be a case where the combined companies will be far greater than before—a classic case of one plus one is three.”
Chuck Moore, Staff VP, ASC & Admin, Wellpoint
“We always believed Oracle was a force to be reckoned with. Now the vision has become a reality.”
Glen Magala, CIO, Atari
“I think it’s a positive development. Oracle has the scale to compete on a global level and keep up the development necessary to provide complete information technology solutions to companies like ours.”
Charlie Peters, Senior EVP, Emerson
“Consolidation is just what’s needed in the enterprise software industry right now. Combining the best of Oracle and PeopleSoft applications will be a big plus for customers. I’m also confident that the combined companies will result in a strong consolidation strategy from JD Edwards to Oracle.”
Jim Bingley, Director, ERP & Reporting, Riverdeep
“I have 100% confidence in the integrity and vision of Oracle’s executive team. And at the end of the day, it’s all about having and creating value for customers.”
Scot Klimke, CIO, Network Appliance
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Aberdeen: “Believe It or Not, Consolidation Benefits Users and Vendors”
Sep. 2005 Aberdeen report confirms the benefits to both users and vendors, highlighting Oracle’s demonstrated best practices
“Technology giant Oracle Corp. successfully demonstrated with PeopleSoft and subsequent purchases that it can move decisively to bring acquisitions under the corporate umbrella with a minimum of disruption.
Oracle’s size and depth of its technology stack, from database to application, allow it to aim for what’s beyond the reach of most other software companies.
Its software strategy of providing a common infrastructure platform supporting business applications across all industries has a direct influence on how the company evaluates and ultimately integrates acquisitions into its portfolio.
The company also views the acquisition process as a way to accelerate the introduction of new functionality into its installed base.
In the end, financially stable enterprise application companies willing to invest in the development of their products with a clear roadmap for the future offer end users the safest haven.”
Source: Aberdeen Group, “Your Enterprise Software Vendor is Being Acquired; How Do You Respond?”, Sep. 2, 2005.
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