Negotiations are under way between Banksia Technology and NetComm to merge the analog modem business of both companies.

The process is expected to take between four and six weeks. By taking one Australian modem manufacturer out of the market, the new company will become the largest modem supplier in the local market, with an estimated 50 per cent share.

The merger could take two different paths due to the fact that NetComm is publicly listed on the Stock Exchange and Banksia is a privately held company.

This could mean the enlarged company may become a vehicle for Banksia to be part of the publicly traded NetComm. Or, it could mean NetComm delisting and becoming part of a privately owned new company.

Chris Howells, managing director of NetComm, said that while the financial details and company structure have yet to be finalised, the merger, "represents the type of consolidation which many analysts in the IT sector have been expecting for some time".

David Stewart, managing director of Banksia, said the company would be better placed to serve the Australian market. "It will also boast a very impressive research and marketing base which will ensure healthy returns to shareholders," Stewart said.

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