SAP is to buy Sybase for $5.8 billion in cash, a 44 per cent premium on the firm's stock price.
SAP said it hoped the acquisition would help push its own software onto mobile devices, using Sybase's own platform as well as winning access to its four billion current subscribers.
Sybase hopes to benefit by boosting its analytics and expanding the markets it sells in beyond its current financial focus.
"The combination of SAP and Sybase will give users the option of running their operations from leading mobile devices and will unleash the full power of mobility, including messaging interoperability, content delivery and mobile commerce services, across all companies and roles and in any location," said Jim Hagemann Snabe, co-chief executive of SAP, in a statement.
"In addition, innovation around Sybase's established database business will pave the way for real' real-time analytics and finally remove the decade-old barrier between business applications and business intelligence," he added.
Sybase will keep its name and management, operating as a separate unit from SAP, with the firm's chief executive and chairman added to SAP's board.
"This combination is a transformative event in the software industry," said Sybase chief executive John Chen in a statement. "This will drive a new wave of enterprise productivity. The combined SAP/Sybase will be able to provide a software offering that enables companies to transform their businesses in an increasingly data-, consumer- and mobile-centric world."
The deal is subject to regulatory approval, but is expected to be finalised in the third quarter of this year.
