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By Felicity Ussher, 16 December 1998 15:31

NEWS Two rival security vendors today announced plans to merge in preparation for immense growth in the PKI (public key infrastructure) market. Zergo, which specialises in security for banks and governments, will pay £34m to acquire Baltimore Technologies, a Dublin-based PKI supplier. The acquisition is based on predictions that the PKI market will amount to $2bn by 2001. Paddy Holahan, Baltimore's VP Business Development, told Silicon.com: "If you're a bit player, you're going to die. You need to be a public company with over 30 per cent market share to survive." Baltimore already has a strong European presence, while Zergo is the dominant PKI vendor in Asia Pacific market, with an established service division. But combined, they are only the world's second largest PKI vendor, due to nTrust's hold on 80 per cent of the North American market. "We will launch a sustained, massive attack in the US, especially in the healthcare and financial markets," said Holahan. Matthew Bowcock, Zergo's director of marketing, added: "nTrust may have a huge market share, but there is little serious competition there." Zergo expects to receive shareholder approval for the merger before January's RSA data security show in San Jose.