SAP Rating: Rating: A1[S]/A+[S]

• SAP to acquire WalkMe for USD 1.5bn in all-cash deal (USD 14/share, 45% premium).
• WalkMe's digital adoption platforms expected to enhance customer experience during tech transitions. SAP see the acquisition as a boost for their Business AI operations.
• Doesn’t seem a spread mover given the size of the deal and that SAP had a net cash position of EUR 5.6bn at Q124. Expected to close Q324; SAP see minimal impact on 2024 EPS.
• We like the company given the strong FCF generation and net cash position though the curve is amongst the tightest in €IG TMT albeit with slightly better rolldown than similar level peers.
• All SAP lines are held in CSPP and the curve seems quite illiquid. EUR 27s (negative spread) not shown below; while still illiquid the line trades more than we would have thought (EUR 43mn in volume over the past 3m as per MIFID data which makes it the second most liquid SAP bond; most likely due to retail-sized denominations).