Microsoft’s board has approved a $9 billion merger with Oracle that will create a new software company, Microsoft Corp., that will be led by its chief executive, Satya Nadella.
Mr. Nadell will become the company’s chief executive officer and chief operating officer.
The deal, first reported by The Wall St. Journal on Wednesday, is expected to close by the end of the year.
It is expected that Microsoft Corp. will acquire Oracle Corp. and that Oracle will merge with Microsoft.
It could take years to close the deal.
Microsoft said on Thursday that it had “signed an agreement with Oracle’s management team and board that allows Oracle to proceed with the transaction as scheduled, and we expect it to close in the third quarter.”
Microsoft said the deal will create an entirely new software and hardware company that will provide “new services, products, and services to Windows, Windows 8, Windows Phone, and other platforms.”
The companies said in a statement that they will continue to work together to deliver the world’s most powerful software.
“We are proud of the partnership that we’ve forged with Oracle,” Mr. Redmond said in the statement.
The company also said it will share its financial results in quarterly filings with the Securities and Exchange Commission and other regulators, and “will also work closely with Oracle on the business opportunities, revenue and cost synergies that may arise.”
In a separate deal, Oracle is to sell its software division, Oracle Corp., for $14.4 billion.
Oracle Corp.’s stock was up 4.9% in premarket trading.
The stock was down 4.3% in after-hours trading.