The company said it had bought up 88% of JD Edward's shares, and planned to acquire the rest by the end of August.

PeopleSoft chief executive Craig Conway said the deal marked an "important milestone" in the company's history.

"The combination expands not only our customer base, product offerings, and markets, but also our talent," he said.

Deal breaker

The tie-up, which was cleared by competition watchdogs last week, looks set to create a new force in the market for specialist software used by businesses.

The deal will cost PeopleSoft about $1.75bn (�1.1bn).

There had been fears that the merger would be blown off course by software giant Oracle, which launched a surprise bid to buy PeopleSoft while it was still in takeover talks with JD Edwards.

PeopleSoft angrily rejected Oracle's takeover offer, saying the move had been timed to cause it maximum disruption.

Oracle responded by pitching its takeover offer directly to PeopleSoft shareholders, criticising the company's performance under its current management.

War of words

In an increasingly acrimonious dispute, Peoplesoft chief executive Craig Conway and Oracle boss Larry Ellison went on to trade personal insults, with both sides alleging unfair propaganda in the battle for investor loyalty.

Oracle said earlier this week that it remained "fully committed" to buying PeopleSoft, whether or not its takeover of JD Edwards went ahead.

However, some analysts believe any tie-up between the two firms would be blocked by competition regulators, an objection also raised by PeopleSoft.

Speculation that Oracle would discontinue some of PeopleSoft's products and operations in the event of a successful takeover - although denied by Oracle - are thought to have put competition watchdogs on their guard.