Microsoft may buy Danish Navision

Danish company Navision makes financial planning software for medium-sized businesses

COPENHAGEN, Denmark -- U.S. giant Microsoft is set to buy Danish software company Navision in a deal valued at $1.2 billion, according to a report.

Negotiations to purchase Navision -- Europe's leading maker of business planning software -- are in an advanced stage and an agreement could be announced as earlier as next week, the Financial Times reported on Tuesday.

Navision said it a statement "it is considering a possible strategic transaction," but did not name the other company involved in the talks. Microsoft has declined to comment on the report.

Microsoft, which already has a partnership agreement with Navision, is the world's biggest software company. Its products include the Windows operating system and Office software for word processing, spreadsheets and presentations.

Analysts said that by acquiring Navision, which is majority-owned by its management, Microsoft would become one of the world's biggest providers of business planning software for medium-sized companies.

Microsoft recently bought U.S. enterprise software company Great Plains in an effort to move into high-growth market for business planning software.

"It also seems to be the right way for Microsoft to enter the European market," Robert Jacobsen, an analyst at Jyske Bank, told Reuters.

Analysts said the deal would be good for Navision as well, given the growing competition in the mid-sized business software markets from rivals such as Germany's SAP and U.S.-based Oracle.

The Microsoft brand name and marketing strength would also help Navision fend off rivals.

However, some analysts questioned the amount Microsoft has reportedly offered to pay for Navision.

"An offer of $1.2 billion is too low. That's where the shares were just a few weeks ago. Microsoft should pay a premium and offer 300 or 320 crowns," analyst Claus Almer, an analyst at investment bank WestLB Panmure, told Reuters.

Navision shares jumped more than 20 percent to 265 crowns in midday Copenhagen trading. The stock reached a 12-month high of 287 crowns last month.