Under the terms of the $1.1 billion stock swap deal, Fargo, N.D.-based Great Plains will become the Great Plains Division of Microsoft and will continue to develop business management software that connects a company's finance and accounting departments to employees, customers, suppliers and business partners, the companies said in a statement.
In morning trading, Great Plains' stock shot up $9.63 on the news to $44.94, while Microsoft stock was up 88 cents at $42.38.
Great Plains competes with J.D. Edwards, Lawson Software and Oracle.
Once the acquisition is completed, Redmond, Wash.-based Microsoft is looking to add Great Plains technology to its online service for small companies, bCentral.
In addition, a combined set of business applications from both companies will be built on the Microsoft.Net Web service, which the software giant said will be accessible from PCs, terminals, and handheld and wireless devices.
The acquisition comes a week after Microsoft issued a profit warning that earnings for its second quarter of fiscal 2001 will be lower than expected. The company also is preparing for oral presentations in its appeal to a federal court ruling that it be broken into separate operating system and software application companies for violating antitrust laws.
The Great Plains acquisition still needs regulatory approval.