The combined company will have an annual revenue of $5bn

The all-share deal will see Symantec swap 1.1242 shares of common stock for each Veritas share.

After the deal Symantec shareholders will own 60% of the combined company, with Veritas shareholders owning 40%.

Shares in Symantec, known for its Norton anti-virus software, fell up to 11% on fears that its growth rate will slow with the acquisition of Veritas.

The deal comes three days after business software maker Oracle agreed to buy Peoplesoft for $10.3bn.

Long-term prospect

The purchase will expand Symantec's reach into the corporate software market and give it a sales staff trained to sell to larger companies.

The combined company will have an annual revenue of $5bn.

A statement from Symantec said: "The combined company will be uniquely positioned to deliver information security and availability solutions across all platforms, from the desktop to the data centre, from consumers and small businesses to large organisations and service providers."

Symantec competes with McAfee and RSA Security anti-virus software, while Veritas' rivals in storage and data backup are companies like EMC and IBM.

But Nitsan Hargil, analyst at Friedman, Billings, Ramsey, said: "While we believe, longer term, that the acquisition of Veritas could make for an exciting company, we are concerned about the negative impact it will have on Symantec's growth profile."