May 24, 2010 - IBM and AT&T today announced they have entered into a definitive agreement for IBM to acquire Sterling Commerce from AT&T for approximately $1.4 billion in cash.

IBM's products and services complement the business-to-business capabilities of Sterling Commerce and together enable the integration of key business processes through the entire cross-channel solution lifecycle - from marketing and selling to order management and fulfillment.  Additionally, clients can now manage their business partner networks in traditional or cloud computing model.

According to Craig Hayman, general manager of IBM's Software Group's WebSphere business, this acquisition will advance customers’ ability to create more agile business networks by improving the way they connect and communicate with partners, customers and suppliers.

Sterling Commerce has more than 18,000 global customers, and the company enables more than 1 billion business interactions a year for clients in the financial services, retail, manufacturing, communications and distribution industries.  Sterling Commerce President and CEO Bob Irwin expects that this acquisition will open the door to additional vertical industries where IBM has an established presence such as health care, government, energies and utilities.

In the call announcing the acquisition, Hayman referenced IBM’s acquisition strategy and aggressive pursuits of high-growth areas. “This is one of those areas,” says Hayman.

According to Hayman, the ability to combine Sterling Commerce technology with IBM’s technologies will bring together capabilities from a number of recent IBM acquisitions such as ILOG’s  rules management and supply chain software, Cognos analytics, which can enhance insights into the supply chain and optimization networks, Cast Iron, with the integration of cloud environments, and Lombardi’s business process functionality. Thus, IBM can enhance Sterling’s portfolio with end-to-end capabilities.

"The broad global reach and additional capabilities IBM offers make this acquisition great news for our customers and partners," said Sterling’s Irwin in the press release. "The combination of IBM's products, services and skills with the Sterling Commerce B2B integration and cross-channel capabilities resulting from this acquisition is unparalleled."

Sterling Commerce will be integrated into the WebSphere organization within IBM's Software Group. IBM and AT&T expect the transaction to close in the second half of 2010, subject to regulatory approvals and the satisfaction of other customary closing conditions.

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