The deal, subject to Micromuse shareholder and regulatory approvals, and other customary closing conditions, is expected to be finalized by the end of March this year.

According to a joint statement, IBM, following completion of the acquisition, intends to establish Micromuse's operations as a business unit within IBM's Tivoli software division.

IBM will also incorporate Micromuse software technology and solutions into its Tivoli software offerings, as well as IBM hardware and services, and market and sell Micromuse software products through its own and Micromuse's worldwide sales channels, as well as IBM Business Partners.

Al Zollar, GM, IBM Tivoli software, who will be heading up the business unit in which Micromuse will be incorporated, says: 'The combination of Micromuse and IBM Tivoli will help companies manage these sophisticated IT environments, deploy new business service management solutions, and deliver new network-based services to customers, employees and trading partners.''