Harrier abandons attempt at German merger
Germany's difficult regulatory system cited
Reseller Harrier Group has pulled out of its proposed merger with Articon-Integralis, exasperated by German business regulations.
The two firms broke off talks after four months of trying to structure a deal lithe enough to slip through the obstructions of German and cross-border regulations.
During this time, they considered plans that could have seen either firm become the lead in a complete take-over or in the acquisition of business assets.
"It was like a 400m hurdles race," said Jim Stoddart, chief executive of Harrier Group.
"Obviously, in any merger you have problems to overcome. But it is normally to do with the companies being merged. In this case, it was regulatory and practical issues."
Harrier has announced to the City that it has received other merger offers, one of which it is considering.
Stoddart implied that a merger was an inevitability. "The market is consolidating. People are contacting each other all the time," he said.
Adam Hart, the KBC Peel Hunt broker who advised Harrier on its merger, declined to comment about the specific deal. But he said: "German regulations are probably more difficult than most in Europe, especially where the company is quoted. Germany is a difficult country to buy in because of local company law."
One example of the hurdles Harrier faced was the difficulty the company encountered when trying to buy out minority shareholders, who have strict protection under German law.
Derek Alway, a partner at mergers and acquisitions advisor Regent Associates, said cross-border mergers are more difficult between listed firms than private ones. "There are huge, fat books of stock market regulations. And you've got the lawyers. You never get rid of them," he said.