Oracle, the world’s largest enterprise software company, has purchased BEA Systems for $8.5bn. Logo courtesy of Oracle.

Oracle Corporation and BEA Systems announced on Wednesday that they have entered into a definitive agreement under which Oracle will acquire all outstanding shares of BEA for US$19.375 per share in cash.

The offer is valued at approximately $8.5 billion (£4.3 bn), or $7.2bn net of BEA’s cash on hand of $1.3bn.

Oracle’s CEO Larry Ellison said: “The addition of BEA products and technology will significantly enhance and extend Oracle’s Fusion middleware software suite.

“Oracle Fusion middleware has an open ‘hot-pluggable’ architecture that allows customers the option of coupling BEA’s WebLogic Java Server to virtually all the components of the Fusion software suite. That’s just one example of how customers can choose among Oracle and BEA middleware products, knowing that those products will gracefully interoperate and be supported for years to come.”

Oracle won over BEA’s board as it raised its offer for the company by 14% to $19.375 a share. The move echoed a pattern also seen with its purchase of PeopleSoft, the landmark deal that triggered wider software consolidation, when Oracle eventually paid considerably more than it originally offered, in spite of threats to reduce the value of its offer.

While lower than the $21 a share that BEA’s board had said it wanted, the Board of Directors of BEA Systems has unanimously approved the transaction. It is anticipated to close by mid-2008, subject to BEA stockholder approval, certain regulatory approvals and customary closing conditions.