Oracle outbid German competitor SAP and won the bidding contest to acquire retail software maker Retek Inc., receiving the nod from Retek's board of directors. The merger agreement obligates Oracle to buy up Retek's stock at $11.25 per share for a total purchase price of $670 million.

Retek has a long history of partnership with Oracle dating back to 1986. Oracle's own estimates have found that nearly 80 percent of Retek's customers are already running applications using its business software. By purchasing Retek, Oracle is obtaining established vertical solutions for its database platform.

As a consequence, Oracle is claiming that the synergy produced by the merger strengthens its hand in the global retail applications market.

"Oracle has the largest applications business in North America, and we intend to expand that leadership position," said Oracle CEO Larry Ellison. "Combining Oracle with Retek is an important step in that direction, and it strengthens our position in the retail applications market globally."

SAP reiterated that $11.00 USD per share was its final offer and stressed that it practices financial discipline in all merger and acquisition transactions. In a press release, the company reaffirmed its commitment to the retail industry and its ability to meet competitive challengers from its peer group.

The agreement must still be approved by Retek stockholders, even as plans for softening the impact of integration are being constructed.