Update: The European Commission has reportedly approved Oracle's acquisition of Sun Microsystems. Now the deal only needs approval from Chinese and Russian regulators.

Original Article: Oracle is acquiring Sun Microsystems for $7.4 billion in cash at a rate of $9.50 per share in cash.

"We expect this acquisition to be accretive to Oracle's earnings by at least 15 cents on a non-GAAP basis in the first full year after closing," Oracle President Safra Catz said in a statement. "We estimate that the acquired business will contribute over $1.5 billion to Oracle's non-GAAP operating profit in the first year, increasing to over $2 billion in the second year. This would make the Sun acquisition more profitable in per share contribution in the first year than we had planned for the acquisitions of BEA, PeopleSoft and Siebel combined."

The two companies have long been partners - for over 20 years as Sun Chairman Scott McNealy pointed out. And now Oracle will own Java and Solaris.

"This is a fantastic day for Sun's customers, developers, partners and employees across the globe, joining forces with the global leader in enterprise software to drive innovation and value across every aspect of the technology marketplace," said Sun CEO Jonathan Schwartz.

"From the Java platform touching nearly every business system on earth, powering billions of consumers on mobile handsets and consumer electronics, to the convergence of storage, networking and computing driven by the Solaris operating system and Sun's SPARC and x64 systems," he added. "Together with Oracle, we'll drive the innovation pipeline to create compelling value to our customer base and the marketplace."

The acquisition is expected to close sometime this summer. Sun's board of directors has unanimously approved it.