Oracle has announced plans to buy Sun Microsystems in a deal valued at $7.4bn (£5.07bn).
The deal comes just weeks after a reported deal by IBM to buy Sun fell apart.
Oracle will acquire Sun common stock for $9.50 per share in cash in the deal, which is valued at $5.6 billion net of Sun's cash and debt.
Oracle is no stranger to big acquisitions, and has bought a series of software firms including PeopleSoft.
"The acquisition of Sun transforms the IT industry, combining best-in-class enterprise software and mission-critical computing systems," said Oracle CEO Larry Ellison.
"Oracle will be the only company that can engineer an integrated system - applications to disk - where all the pieces fit and work together so customers do not have to do it themselves. Our customers benefit as their systems integration costs go down while system performance, reliability and security go up."
Oracle president Safra Catz said Oracle expects the acquisition to ass to Oracle's earnings "by at least 15 cents on a non-GAAP basis in the first full year after closing".
"We estimate that the acquired business will contribute over $1.5bn to Oracle's non-GAAP operating profit in the first year, increasing to over $2bn in the second year" said Catz. "This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined."
Sun Chairman Scott McNealy welcomed the deal. "This combination is a natural evolution of our relationship and will be an industry-defining event."