Merger of Mostostal Zabrze and Piasecki falls through

Construction companies Mostostal Zabrze and Pia Piasecki, who have been negotiating a merger for the past eight months, announced on Friday that the deal had fallen through. Even before the talks began, analysts had been widely anticipating the merger, since the two companies have a common financial investor and complement each other both geographically and in terms of business activity. Bank Handlowy controls 42.1% of Piasecki shareholder votes and 34.4% of Mostostal's, and it has been suggested that the bank could get a better price from a potential foreign investor if the two companies joined forces. Mostostal, which operates primarily in southern Poland, specializes in industrial construction, while Piasecki, which focuses mostly on central regions, concentrates on housing development. The companies said in a statement that due to the difficult situation on the market the merger would not guarantee sufficient benefits. However, it is more likely that the real reason was the failure by shareholders other than Handlowy to agree on a share exchange parity ratio. (Gazeta Wyborcza, Oct. 27-28, p. 31) T.J.