IBM TO PAY $1 BILLION CASH FOR INFORMIX UNIT

International Business Machines Corp said it will pay $1 billion in cash to buy Informix Corp's database software business, bolstering IBM in its battle with rival software maker Oracle Corp. IBM, the world's largest computer maker, is one of the two biggest makers of software used to manage massive corporate business operations along with fierce rival Oracle. Menlo Park, Calif.-based Informix, once a big competitor to Oracle, fell on hard times in the mid-1990s.

Informix gives IBM one of the leading database systems used in so-called data warehousing, business intelligence and transaction-handling systems used by more than 100,000 customers, including phone companies Verizon Communications and Deutsche Telekom AG, retailer Sears and air reservation system Sabre.

IBM said that once it completes the deal it will integrate Informix software into the IBM database system under General Manager Janet Perna, combine Informix's sales team with IBM's sales force and support existing Informix customers.

"This acquisition of Informix allows IBM to bring the benefits of leadership database technologies to more customers faster," Sam Palmisano, IBM president and chief operating officer, said in a statement.

The deal is expected to close in the third quarter.

After the close of the deal, Informix will be renamed Ascential Software, reflecting the company's remaining database applications business.

The new company will join one of about 60 application makers and become one of IBM's strategic partners, participating in a joint-marketing relationship.

Ascential Software will use the $800 million after-tax proceeds from the sale to fund the company's growth and will use a substantial portion, yet to be calculated, for a stock buy-back plan.

Ascential will begin its life with $1 billion in cash and no debt.