Brokat Infosystems of Germany said it plans to acquire MeTechnology AG, Leipzig, Germany.
Under the agreement, MeTechnology would be merged into Brokat and MeTechnology's ME/4 electronic commerce software would be integrated with Brokat's Twister platform.
Both companies offer software to enable financial institutions and other businesses to connect back-end systems with electronic distribution channels, such as the Internet, call centers, mobile phone networks, smart cards, and interactive television.
Brokat chief executive officer Stefan Rover said: "In addition to enhancing our comprehensive product offering, the merger will firmly secure our market leadership of more than 90% in Germany and increase our current 40% market share in Europe."
He said that would allow Brokat "to concentrate on expanding our international presence, particularly in North America." The company has set up a base in Atlanta.
Brokat's Twister is in use at 1,500 institutions worldwide. MeTechnology has doubled sales of its transaction and integration software in the last year and, in Europe, has signed Postbank, Dresdner Bank, and Commerzbank.
After the merger, Brokat would employ about 420 in 12 offices.