Oracle has offered to buy BEA Systems for about $6.66 billion (€4.69 billion).
Oracle offered $17 per share in cash for BEA, which is a 25 per cent premium over BEA's closing stock price yesterday. Shares jumped in pre-market trading to match the offer price.
It is Oracle's latest effort to up the ante against Microsoft and Germany's SAP in the fiercely competitive market for business software.
Billionaire investor Carl Icahn has been pushing BEA to put itself up for sale, and by October 4th he had built a 13.22 percent stake in the company.
BEA sells application server software and so-called middleware, which is used by software developers to establish systems on which other software applications operate.
Oracle has spent the last several years buying up other specialty software makers, in an effort to compete with Microsoft and SAP.