Shares in SAP fell more than 5.4 per cent in Frankfurt today after analysts voiced doubts over the German business software giant’s planned acquisition of Business Objects, for €4.8 billion (£3.3 billion) in cash.

The acquisition of the Franco-American group, which specialises in business intelligence systems, is SAP’s largest to date and follows a string of multibillion-dollar deals by Oracle, its American arch rival.

In March Oracle snapped up Hyperion, a smaller rival to Business Objects, for $3.3 billion (£1.6 billion).

Business intelligence software is used to glean insights — such as potential cost cuts or sales opportunities — from the vast stores of data collected by companies in the digital age.

The sector is seen as a key growth area for database companies facing maturing core markets.

However, investors appeared unimpressed by SAP’s departure from its long-running policy of focusing on organic growth amid fears that it had overpaid for Business Objects.

The agreed price of €42 a share represents a 20 per cent premium on Business Objects’s closing price on Friday.

As the acquisition was announced, Business Objects also said that its third-quarter sales came in between $366 million and $370 million, missing a forecast made in July of $382 million.

Earnings-per-share targets were also missed.

Seeking to ease concerns, SAP said the acquisition of Business Objects was designed to gain new business in the hard-fought market to supply software to small- and medium-sized companies. The group is aiming to more than double its customer base to 100,000 by 2010.

Henning Kagermann, the SAP chief executive, said “The acquisition of Business Objects is in keeping with SAP’s stated strategy to double our addressable market by 2010.”

SAP currently has about 41,200 clients and sold software licenses worth €3.1 billion last year. In another major shift in strategy, SAP recently revealed a new "software as a service" model, where software is delivered over the internet and paid for through subscriptions - a model some say could cannibalise SAP's license business.

Analysts voiced apprehensions over Mr Kagermann’s reasoning, raising concerns that SAP has handed Oracle too much of a lead in making acquisitions, a strategy it now appears to be endorsing.

Analysts at Cowen, the broker, said: “Despite SAP's assertion to the contrary, this deal is a significant departure from SAP's long-stated position that it intends to grow its code base organically, and appears to us to be a tacit acknowledgment that Oracle's M&A strategy has merit."

There were also concerns that SAP risks damaging its relationship with Microsoft, the world’s largest software developer, which competes with Business Objects in the mid-market.

Business Objects will operate as a stand-alone unit in the SAP group, the companies said. John Schwarz, the Business Objects chief executive, will continue in his position and is expected to join SAP's executive board.

SAP also said it intends to propose that Bernard Liautaud, chairman and founder of Business Objects, joined the board at the company's next shareholder meeting.

Business Objects generated net profits of $75.4 million last year, on revenues of $1.25 billion. Shares in the French software firm surged 17.37 per cent, hitting €41.08 in mid-morning deals.

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