Amica rejects merger with competitor
Domestic household electrical goods manufacturer Amica confirmed last week that it would not buy its largest local competitor, Polar, from Frances ailing Moulinex-Brandt group because incompatibilities between the management, production and distribution practices of the two firms.
We couldnt be partners, said Przemysław Grodzki, Amicas marketing manager. We produce a lot of the same types of products, which are in competition with each other.
He said that initial talks between the two firms were unsuccessful because of differing management policy on acquiring external investment. Our board of directors has always wanted to avoid capital from outside Poland, as used by Polar.
French electrical goods firm Moulinex-Brandt is Polars majority shareholder with 94.8%, but since it went into receivership in September and announced the sell-off of its worldwide subsidiaries, speculation has been rife about Amicas takeover of Polar.
According to Przemysław Sawala-Uryasz, an analyst at Dom Maklerski WBK, the merger would have made Amica Polands biggest household electrical goods manufacturer. Such a merger would give Amica 50% of the refrigerator market, 30% of the washing-machine market and around 45% of the stove market, Sawala-Uryasz said. Polar was unavailable for comment as the Business Journal went to press.
The decline in domestic sales and exports of electrical goods has seen Amicas net profits slide from zł. 40 million ($9.5 million) last year to losses of zł. 1.19 million ($283,000) in the first three quarters of this year. Amicas excess production capacity increases the likelihood that the merger will not go ahead. I am not convinced that this is the best time for building additional production capacity while the market is slowing down, Sawala-Uryasz said.
But Amicas decision does not seal the fate of Polar. According to Sawala-Uryasz, Brandt is more likely than Moulinex to survive the current crisis.
While the critical condition of Moulinex requires that its subsidiaries be sold off, Brandt is in far better shape, so its demise is not yet imminent, Sawala-Uryasz said.
