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Oracle Corp., the world's third largest software maker, has entered into a "definitive" agreement to buy BEA Systems Inc. by raising its bid for the company by 14 percent to USD 8.5 billion. The agreement marks the end of a three-month long campaign by Oracle for acquiring BEA Systems.

Under the deal, expected to close by the middle of the year, Oracle will pay nearly USD 19.38 per share. That purchase price is above Oracle's initial offer of USD 17 a share, which BEA had soundly rejected, saying it would need USD 21 a share for any party to enter acquisition talks with the company.

BEA Systems is one of the leading makers of computer coding called "middleware" that helps business applications interact more smoothly with databases. The software also helps business computer systems interact with each other by allowing companies to integrate computer systems having this software.

"This deal is a very big step toward completing our vision of becoming the strategic enterprise software vendor of choice," Oracle CEO Larry Ellison said during a conference call. "Simply stated, this combination of BEA gets us where we need to be ... across the software stack, in more verticals and more regions across the world."

Ellison also noted that the acquisition would accelerate the adoption among the combined companies' customers of Java-based middleware technologies and service-oriented architectures (SOA). It will also increase the Oracle's footprint in key regions such as Greater China and in industries such as telecommunications, he said.

The deal is also expected to give Oracle a presence in the high-end of the middleware market, said Mike Gilpin, vice president and research director for Forrester Research.

BEA Systems also offers a high-end messaging product to supplement Oracle's offering and can dish out stronger enterprise-service-business technology via its AquaLogic product, which allows customers to use SOA technology to access information, Gilpin noted.

Oracle in March acquired Tangosol, a transaction-processing specialist whose products should complement those of BEA as Oracle brings those assets under one roof, Gilpin said.

The merger will also give Oracle a greater presence in virtualization, a market it is just entering but one in which BEA's JRockit Java Virtual Machine has had a presence for several years.