Microsoft Corp has offered to buy Fast Search & Transfer, a Norwegian Internet-search software firm, for about $1.2 billion, the companies said on Tuesday.

"Fast's board of directors has unanimously recommended that its shareholders accept the offer," Fast Search & Transfer said in a statement.

"This offer represents a 42 percent premium to the closing price on Jan. 4 (the last trading day prior to this announcement) and values the fully diluted equity of Fast at 6.6 billion Norwegian crowns or approximately $1.2 billion," Fast said.

The deal is subject to regulatory approval and acceptance from shareholders with more than 90 percent of Fast's shares, Fast Search & Transfer said.

Microsoft Corp said in a statement the transaction is expected to be completed in the second quarter of 2008.

The companies have a number of complementary strengths that help businesses deliver productivity and improved results, Microsoft said.

FAST has high-end search solutions, and Microsoft offers worldwide customer reach and an extensive partner network, the software giant said.