The US software giant Microsoft has agreed to pay US$1.2 billion ($1.56 billion) for the Norwegian technology company Fast Search and Transfer, a leading rival of Britain's Autonomy.
Microsoft's readiness to pay 19 kroner ($4) a share for Fast Search, a 42 per cent premium to the company'sclosing share price on Friday, surprised analysts and boosted valuations of similar businesses.
Like Autonomy, Fast Search specialises in "enterprise search" technology, selling products to businesses that enable staff to find key information and data more quickly.
The deal added to speculation about consolidation in the sector. Mohammed Mowala, an analyst at Goldman Sachs, said: "We believe this transaction should be significantly positive for Autonomy as it highlights the strategic value of this asset - Autonomy is now the only remaining pure-play vendor in enterprise search space."
Fast Search's blue-chip clients include Reuters, Pearson and Dow Jones. However, some analysts believe Microsoft's acquisition of the company would diminish Fast Search's competitive threat to Autonomy, which already outsells it.
Michael Brest, an analyst at UBS, said some businesses would be less comfortable trading with Fast Search once it was owned by Microsoft.
Microsoft has yet to secure control but 37 per cent of shareholders have accepted.
