A potential merger between two leading providers of access control technology could transform the industry by creating a new super-company in what is still a highly fragmented market.

Swiss-based Kaba and Germany’s Dorma plan to launch a merger that will result in the formation of the second-largest company in the European access control sector behind Assa Abloy.

Should the merger plan be approved by Kaba shareholders on May 22, the new company would have combined revenues of as high as $2.1 billion, as well as 16,000 employees and operations in over 50 different countries.

“By merging our two globally established companies, we will significantly strengthen our market position,” said Hans Gummert, Dorma chairman, in a statement. “Our strategies also largely correspond with one another.”

Kaba is a leading international provider of access control solutions, enterprise data collection technologies and key systems. Dorma is a supplier of building access solutions and related services, specializing in door closers, automated door systems and glass fittings.

If approved, the move will have far-reaching implications for the access control industry in Europe, the Middle East and Africa (EMEA) given the diffuse state of supply at present, with the top 10 players in the region comprising only half of the market last year.

“The combination of the two strong brands Dorma and Kaba will result in the creation of a leading company in our industry,” said Ulrich Graf, chairman of Kaba. “This merger will allow our companies to become one of the world’s largest access control companies in this highly fragmented market.”

Market consultancy IHS said the decision will also enable the two parties to the merger to bring together complementary product sets that will help to offset any gaps in their respective line-ups of access control solutions and technologies.

Blake Kozak, IHS principal analyst for security and building technologies, noted that Dorma’s strengths lie in a range of door technologies, while Kaba specializes more in pedestrian access solutions and electrical equipment.

“Dorma will bring to the deal door automation-control expertise including revolving doors, swing doors, slide doors and industrial doors, while Kaba offers a larger portfolio of pedestrian-control equipment such as turnstiles, gates and security doors, as well as hospitality and commercial electronic devices,” said Kozak.

The proposed merger deal would see the creation of a new company called Dorma+Kaba, in which Kaba would lay claim to a 52.2 per cent equity stake as a holding company.

The Mankel and Brecht-Bergen family, who are the owners of Dorma, would in turn obtain a 9.1 per cent stake in Kaba, bringing their total holdings of the combined business to 52.3 per cent.

While the merger will see Dorma’s current owners acquire a majority share in the new company, they will still lack full control post-merger because their direct holdings will remain at 47.5 per cent.