Microsoft is going Nordic for its next billion-dollar acquisition.  

The software giant offered to buy the Norwegian internet-search firm Fast Search & Transfer for about $1.2 billion in cash. The bid represents a 42 percent premium to FS&T's closing price yesterday. Its shares soared 40 percent on the news.

The Oslo-based company sells enterprise search, which helps large businesses search their vast data banks. The company was founded in 1997 and employs about 500 people.

"Until now, organizations have been forced to choose between powerful, high-end search technologies or more mainstream infrastructure solutions," Jeff Raikes, head of the Microsoft business division, said in a statement. "The combination of Microsoft and FS&T gives customers a new choice: a single vendor with solutions that span the full range of customer needs."

The deal must still be approved by shareholders. Two major institutional owners representing 37 percent of the voting stock have already approved it. The board has also approved the offer.

This is the first major acquisition for Microsoft since it scooped up Aquantive last year for $6 billion.