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Last Updated: Tuesday, 15 June, 2004, 08:42 GMT 09:42 UK
Gates 'held no formal SAP talks'
Microsoft founder Bill Gates
Microsoft's Bill Gates was swiftly rebuffed
Merger talks between Microsoft and German rival SAP never became serious, a senior SAP executive has said.

Microsoft's revelation last week that it had approached SAP about a tie up rocked the software industry and sparked fevered speculation.

But Stephan Rossius, SAP senior vice president, said there was no "formal discussion or negotiation" between the two firms, the AFP news agency reported

He said SAP listened to Microsoft's proposals and then backed away.

Microsoft was forced to admit last week that it had held talks with SAP as the fact was about to become evidence in a bitter court battle over the competition implications of US software firm Oracle's hostile takeover bid for Peoplesoft.

Listening, not talking

Microsoft acknowledged it had "initiated preliminary discussions with SAP to explore the possibility of a merger between the two companies".

But it said it had abandoned the talks "due to the complexity of the potential transaction", and had no intention of reopening them.

However, Mr Rossius said SAP had felt little interest in the merger.

"Based on general Microsoft strategy, when they want to engage in a certain new business environment, they ask really the number one in that business," he said.

"We were listening to that but then it was our decision to not further engage in this," he said.

SAP is the world's biggest supplier of business software, outranking both Oracle and Peoplesoft in that particular segment of the software market.

Mr Rossius was in Tokyo to launch a tie between SAP and Fujitsu which will package the Japanese computer maker's hardware with SAP products.

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