Merger Blues Hit USR and 3Com

Uncertainty about the structure of the merged companies is deterring dealers from buying product

Dealers are holding back from buying product from 3Com and US Robotics (USR) because the structure of the combined operation is expected to remain uncertain for at least 90 days.

3Com bought USR in a $6.6 billion stock swap two weeks ago. But the deal has meant that when the merger goes ahead, it will have 13 distributors (PC Dealer, 5 March).

Sean Pryce, managing director of reseller The Fractal Partnership, said he had now decided not to commit himself to purchasing USR?s total control hub.

?All I really want is information, but we won?t hear for at least three months so we?ll just channel our energies in another direction,? he said.

?I don?t know who is going to distribute the products and I don?t like selling over-distributed products because it ends up turning into a Dutch auction.?

It has also emerged that staff at 3Com and USR are banned from talking to one another while the companies function as competitors for the three months before the acquisition is completed. Both companies are understood to be operating a recruitment freeze.

3Com European marketing director Bob Cushing said: ?There are issues that need to be talked about. But most understand there?s very good synergy between the companies.

?Both organisations have strong channels in Europe ? it?s not as if one side is bailing out the other. There?s nothing in the channel we would have to fix.?

Cushing claimed one of the motivations for the merger was to combine the enormous skill pool of the two firms and that redundancies did not form part of the equation.

He confirmed that communications between the companies had been severed, but refused to comment about the recruitment freeze.

Cushing added it was frustrating that the company could not inform dealers of any changes for at least 90 days.