Oracle has won the bidding to acquire retail-management application vendor Retek Inc. Early Tuesday morning, Oracle issued a statement saying it had signed a definitive merger agreement with Retek under which it will pay $11.25 per share of Retek stock or about $630 million to acquire the company.

SAP issued its own statement early Tuesday saying that it would not increase its "best-and-final" offer of $11 per share and that Retek had subsequently terminated the merger agreement between the two companies. Oracle's statement also said that SAP, which had struck a deal last month to acquire Retek for $8.50 per share, had dropped out of the bidding for the software vendor.

Although Retek had urged shareholders to accept SAP's offers, up to and including its final $11-per-share bid, Oracle's subsequent $11.25-per-share offer was apparently too good to pass up. "We believe that Oracle's offer is a good deal for Retek shareholders, and all directors in attendance at our board meeting have recommended that it be accepted," said Marty Leestma, Retek president and CEO, in the Oracle statement. "We will work with Oracle over the next several weeks to ensure that the integration is not disruptive for our clients and employees," he said.

Information about when Oracle and Retek expect to complete the acquisition and how Retek's operations would be combined with Oracle was not immediately available.

The acquisition is seen as a critical move by Oracle to expand its software applications business into vertical markets such as the retail industry. During the bidding for Retek, Oracle CEO Larry Ellison argued that the two companies were a natural match because nearly 80% of Retek customers run its retail applications on Oracle's database software in conjunction with other Oracle apps.

In Oracle's statement, Best Buy Co. CIO Bob Willet, a Retek customer, said most Retek customers run Oracle's financial and human-resource-management apps, "so Oracle buying Retek is a perfect fit for the retail industry."