Avnet stakes out Marshall

Components distributor Avnet stepped up its bid to dominate the sector when it unveiled its intention to acquire Marshall Industries.

Marshall, which is the fifth largest distributor in North America, will be purchased by Avnet for a sum of about $830 million. The agreement will also result in the acquisition of UK components distributor Flashpoint.

Flashpoint is the alliance partner of Marshall in the UK and is financially linked to it through Sonepar Electronique (SEI). Marshall owns 16 per cent of SEI, which in turn owns six per cent of SEI Diploma. Flashpoint is part of the Diploma group. Alongside the Marshall bid, Avnet has also made an approach for Diploma, which has been initially accepted and is now at due diligence stage.

Sources close to the deal claimed that Marshall is unlikely to interfere heavily in the running of Flashpoint, but because of the company's close links with Intel, it is unlikely that the UK distributor will be able to continue with its non-Intel standpoint.

The combined revenue of Avnet and Marshall, which is expected to be more than $8 billion this year, will bring Avnet closer to its main rival Arrow.

The latter has been the number one components distributor in the world since it superseded Avnet in 1995 with the acquisition of US distributor Gates.

With further takeovers in Europe - including Dutch distributor Eurotronics - Avnet hopes to regain the top spot. The company has acquired more than 20 firms in the past six years.

Didier Gerfaud, European marketing communications director at Avnet, said: 'This was an opportunistic buy for Avnet. Marshall was interesting in terms of its product portfolio, which is very complementary to our own. It also has great expertise in e-commerce.'

But he also admitted that the merger would result in redundancies in North America, although numbers were not yet available. The deal is expected to be completed in October.

See Analysis, page 14.