Number two global software maker Oracle said Friday it was offering 6.68 billion dollars cash to buy rival business software group BEA Systems.
The price of 17 dollars a share would be a 25 percent premium to the most recent closing price of BEA, which is based in San Jose, California.
"We have made a serious proposal including a substantial premium for BEA," said Oracle president Charles Phillips.
"We believe our all cash offer provides the best value for BEA's shareholders and the best home for BEA's employees and customers. This proposal is the culmination of repeated conversations with BEA's management over the last several years. We look forward to completing a friendly transaction as soon as possible."
BEA has been under pressure from investor Carl Icahn, who holds a 13 percent stake, to make a move to increase value for shareholders of the struggling company.
The deal comes as Oracle tries to stay ahead, in the growing sector of business software, of German rival SAP, which earlier this month announced a deal for French software maker Business Objects for 4.8 billion euros (6.8 billion dollars).
Oracle and SAP have been going head-to-head in competition for software to help companies carry out a variety of tasks, such as managing sales and tracking financial and inventory data.
The US firm outmaneuvered SAP in 2004 to buy rival firm PeopleSoft and then outbid the German group a year later for another software maker, Retek.
Oracle has sued SAP alleging it looted Oracle's software libraries to gain a competitive advantage. A trial is set for 2009 in California.