NEW YORK (AFP) -
US business software giant Oracle said Wednesday it had reached an agreement to take over rival BEA Systems in a 8.5 billion dollar deal.





The deal, which has won the approval of BEA's board of directors, comes after BEA had rebuffed a prior takeover from Oracle last year valued at 6.68 billion dollars.



The two technology firms hope to close the deal by mid-2008 depending on regulatory and shareholder approvals.



Oracle founder and chief executive officer Larry Ellison said the takeover would significantly boost the California-based firm's software capabilities and enhance Oracle's earnings.



"Over the past several months our board of directors, with the assistance of independent financial and legal advisors, has reviewed various ways to maximize stockholder value, including engaging in discussions with third parties about a possible sale of the company," BEA's CEO and chairman, Alfred Chuang, said.



Oracle's takeover values BEA, which is also headquartered in California, at 19.37 dollars per share compared with its prior bid of 17.00 dollars.



Oracle, the world's second-largest software group, is mounting a fierce battle against German rival SAP in the big market for software to help companies carry out a variety of tasks, such as managing sales and tracking financial and inventory data.



Some US media reports have suggested activist billionaire investor Carl Icahn had pressured BEA to accept a takeover offer from Oracle.



Icahn issued a statement on the heels of Wednesday's announcement by the companies saying he fully backed the deal.



"This transaction is an excellent example of the great results that can be achieved for all constituencies when the shareholder activist is able to work cooperatively with management," Icahn said.



Icahn, who has an almost 13 percent stake in BEA, has agreed to vote in favor of the takeover.