Navision Confirms Merger Talks

COPENHAGEN -- Navision, one of Europe’s leading manufacturers of software that helps medium-size businesses run their operations and finances, confirmed Tuesday that it was in discussions to be acquired, after reports that Microsoft Corp. was set to pay $1.2 billion for the Danish enterprise software firm.

But Navision officials declined to identify their suitor. Microsoft officials also declined to comment. The Financial Times reported Tuesday that discussions were in their final stages and an announcement was expected next week.

Navision shares soared by as much as 24% in Denmark. Analysts said the deal would make sense for Navision as competition heats up with software rivals such as Germany’s SAP and Oracle Corp., which are going for the mid-size business market in which Navision operates.

The Microsoft brand name, its global marketing power and its financial strength would give Navision an edge over rivals.

“It also seems to be the right way for Microsoft to enter the European market,” Jyske Bank analyst Robert Jacobsen said.

Navision, which is 56% owned by its five founders, already is a key partner for Microsoft. By combining Navision with its recently acquired enterprise software unit Great Plains, Microsoft would become one of the world’s leading providers of business planning software to mid-size companies.

It is a high-growth market into which Microsoft wants to expand. Industry sources said Microsoft has been working on the acquisition for 12 months.