Palm Inc. has agreed to buy Handspring Inc. for about $169 million, the companies said, ending years of speculation that the two handheld device makers would become one.

The deal will not be completed until the fall and will happen only after Palm spins off its software unit, PalmSource. Handspring shareholders will receive 0.09 share of Palm stock for each share of Handspring they own, the companies said.

If the deal were done Wednesday, with Handspring shareholders getting 13.9 million Palm shares at $12.15 apiece, it would be worth $168.9 million. But the price will not be set until after the PalmSource spinoff, which will not take place until the fall.