Novell is to be acquired by software firm Attachmate in a deal expected to be worth $2.2bn (£1.37bn), which will also see some of Novell's intellectual property assets sold to a consortium led by Microsoft.
The deal is subject to regulatory approval, and is expected to close in the first quarter of 2011, according to Novell.
Few details have been disclosed other than a joint statement from the two companies outlining the planned buyout.
Under the terms of the agreement, Attachmate will acquire Novell's assets and will operate these as two separate business units - the Suse Linux subsidiary and the rest of Novell - and add these to its existing Attachmate and NetIQ brands.
However, Novell also disclosed that it has entered into a second agreement to sell "certain intellectual property assets" to CPTN Holdings LLC, a consortium of technology companies which includes Microsoft.
These assets have not been identified, but Novell owns the copyrights to Unix, as confirmed earlier this year in a court ruling as part of the long-running SCO legal saga.
The move could therefore signify an ominous new move in Microsoft's campaign against Linux, which the software firm claims infringes on its own intellectual property, although it has never offered evidence to substantiate this assertion.
Novell and Microsoft entered a joint agreement in 2006 which covered patents and an intention to deliver greater compatibility between the companies' products.
Novell president Ron Hovsepian explained in a statement that the move represents the best way forward for Novell's shareholders.
"We also believe the transaction with Attachmate Corporation will deliver important benefits to Novell customers, partners and employees by providing opportunities for building on Novell's brands, innovation and market leadership, " he said.
Novell was once the leading network software vendor with its Netware operating system, but gradually lost market share to Microsoft's Windows NT, the ancestor of Windows Server 2008.
Attachmate develops terminal emulation software and network tools, especially through its NetIQ subsidiary.
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