San Francisco - Enterprise software behemoth Oracle is to buy the struggling server company Sun Microsystems for 7.4 billion dollars, the companies announced Monday.

The deal came just weeks after IBM withdrew its offer to buy Sun, which for years has been struggling to maintain its business of supplying high end servers to banks, telecommunications companies, universities and other customers for heavyweight data crunching.

Oracle's offer of 9.50 dollars a share represented a slight increase over IBM's final offer before its talks with Sun collapsed. The deal includes a 5.6-billion-dollar buyout plus the assumption of around 1.8 billion dollars in debt.

The two companies had a long history of cooperation - Oracle's programs run on Sun's Java language and on its processors and operating systems. The companies said the deal could transform the enterprise computer market, by giving Oracle a powerful hardware division to complement its sophisticated software business that can help it match offerings of competitors like IBM, Hewlett-Packard and Cisco.

The combination "enables us to deliver complete and integrated computer systems, from database to disk," said Oracle CEO Larry Ellison.

"That array of technology and solutions will be unmatched by any other company," added Sun CEO Jonathan Schwartz, who predicted the deal would create "a new leader across the entirety of the data center."

Sun's board of directors has already approved the deal, according to a statement issued today, which said the sale is subject to regulatory approval and should be completed this summer.