IBM will acquire EDI specialist Sterling Commerce from AT&T for approximately $US1.4 billion in cash.

IBM is betting that business exchange of data electronically will grow dramatically, from banks exchanging transaction data and manufacturers sourcing raw materials electronically, to retailers automating stock replenishment and managing orders online.

According to IBM, the combined technologies and expertise of IBM and Sterling Commerce will make business and partner networks smarter and more efficient by enabling integration beyond the enterprise.

The company believes that through this acquisition, clients will be able to extend the capabilities of their existing systems using, for example, IBM's rules management, analytics and business process management software. This can enable these organizations to respond more nimbly to sudden business challenges as they happen.

Following the close of the acquisition, approximately 2,500 Sterling Commerce employees will be integrated into the WebSphere organisation within IBM's Software Group.