MORRISVILLE,Tekelec and Santera have decided to merge their next-generation switching business with Tekelec owning a majority in the new venture.

The new venture will be called Santera, a Tekelec company.

The new switches will focus on opportunities created by carriers moving to packet-switched networks rather than traditional circuit switched.

A Tekelec spokesperson said the new unit would compliment its Morrisville-based operation.

Both Tekelec and Santera maintain operations in Plano, TX.

“The combination of Tekelec and Santera Systems leverages the strengths of the two companies’ current packet telephony resources and positions the new subsidiary with the intellectual and technological assets to take advantage of evolving market opportunities,” said Fred Lax, president and chief executive officer of Tekelec in a statement. “Our combined next-generation switching unit will have the product portfolio, operational expertise, global reach and financial strength to position ourselves to be a preferred switching solution provider for service providers worldwide.”

Tekelec will contribute $28 million in cash plus its packet telephony business to the venture. Santera will contribute $12 million in cash and its existing assets. Tekelec will own 52 percent of the venture initially, can exercise an option to gain as much as 62.5 percent ownership through June of 2005 and then can buy out Santera’s ownership entirely by 2007.

The new venture will have its own board of directors, led by Lax.