The European Commission is set to clear the $7.7bn hostile takeover bid by Oracle for rival software group PeopleSoft in a move that is likely to pave the way for the creation of a new US software giant.

Mario Monti, the European Union competition commissioner, is expected to announce the clearance before he steps down at the end of next month. Though he still has to consult the EU's national antitrust regulators, it is unlikely that he will change his position.