Database provider and business software maker Oracle said this morning that it has entered into a definitive agreement to acquire Sun Microsystems in a deal worth about $7.4 billion.

Oracle said it will acquire all the outstanding stock of Sun for $9.50 per share in cash, representing a 42.1 percent premium from Friday's closing price of $6.69.

But after taking into account Sun Microsystem's cash and outstanding debt position, the deal's value is only $5.6 billion, both companies said.