AUSTIN (AP) _ Vignette Corp. on Monday announced plans to merge with another software company, OnDisplay Inc., in a stock swap executives say is worth about $1.7 billion.

Austin-based Vignette would issue 1.58 shares of its stock for each share of San Ramon, Calif.-based OnDisplay, a 32 percent premium at Friday's closing prices.

Shares of Vignette closed in Nasdaq trading Friday at $43.81 1/4, down $2.93 3/4, or 6.3 percent. OnDisplay shares closed at $52.25, down $10.50, or 16.5 percent, also on the Nasdaq.

Both companies make software for electronic commerce and Web site management. Merged, they would employ about 2,000 people in the Americas, Europe, Asia and Australia.

Vignette executives expect to close the transaction in the third quarter, subject to approval by OnDisplay's stockholders and other customary closing conditions.