Oracle Corp will buy network equipment maker Acme Packet Inc for $2.1 billion, putting it in a better position to compete with Cisco Systems Inc in moving data securely over internet networks.
Shares of Acme were trading 7 cents above the offer price of $29.25 in early trading on Monday, suggesting that some investors anticipate a counter bid.
The deal is Oracle's biggest since it bought Sun Microsystems in 2010 for about $7 billion. The company bought nearly a dozen companies in 2012, including Eloqua Inc for $810 million in December.
Telecom carriers have been dumping wireline and other legacy services as people increasingly use a newer breed of devices to access Internet and businesses shift to IP (internet protocol) networks, an area where Acme Packet specializes.
"Users are increasingly connected and expect to communicate anytime and anywhere using their application, device, and network of choice," Oracle said in a statement.
Oracle Chief Executive Larry Ellison, who has used acquisitions to boost the company's revenue dramatically over the past decade, had said in October he would not rule out a big deal "down the road".
"We have been expecting Oracle to make a bigger push into the networking market as convergence across the IT world appears to be inevitable and today's deal supports this notion," said Brian White, an analyst at Topeka Capital Markets.
The offer represents a 22 percent premium to Acme Packet's Friday close on the Nasdaq. The deal, which Acme said is expected to close in the first half of 2013, is worth about $1.7 billion, net of cash.
Oracle shares were down 1 percent at $35.88 in early trading on the Nasdaq.
Shares of Acme rival Sonus Networks Inc also rose 14 percent on the news, while those of Juniper Networks Inc were up 2 percent.
Acme has been hit by weak telecom spending in the last few quarters as carriers spend less on new projects and delay existing ones. Its shares had fallen 18 percent in the last year as of Friday.
Acme also reported fourth-quarter earnings of 9 cents per share, excluding items, on revenue of $70.7 million.
Analysts expected an adjusted profit of 8 cents per share and revenue of $68.9 million, according to Thomson Reuters I/B/E/S.