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German Software Maker SAP Sees Benefits From Trump Tax Plans

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(Bloomberg) — German software maker SAP SE plans to capitalize on the Trump administration’s efforts to encourage the repatriation of cash held by U.S. companies overseas, which could set the stage for spending by businesses on large-scale software upgrades.

“If a large company repatriated cash and wanted to put it to work, software projects would be an obvious choice,” SAP Chief Executive Officer Bill McDermott said in an interview.

Business from the U.S. made up about 31 percent of SAP’s fourth-quarter revenue of 6.72 billion euros ($7.25 billion), and about one-quarter of its 84,000 employees are U.S. based. Coupled with any incentives that might emerge for infrastructure spending, a tax break for repatriation of overseas profits may offer sizeable benefits for SAP, McDermott said, along with other software companies.

Separately, the software sector could see stepped-up acquisitions if the cash repatriation tax break comes through. However, SAP, as a German company, would not benefit from that tax incentive. McDermott has said that after an acquisitions binge in recent years, SAP would likely be open to only smaller deals this year.

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