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Union's Merger with United Bicycles Fails
Negotiations involving a merger between bike makers Union (The Netherlands) and United Bicycles (Belgium) have failed. According to a press release dated October 19, differences in views between the two companies regarding the joint venture were the main reason for the break-up. One day earlier (October 18) Dutch Accell Group NV announced that it had been approached by Union for a participation or a complete take-over of Union.

Union and United Bicycles have been negotiating for months about a possible merger that resulted in the signing of a letter of intent end September. That the merger is stopped is, according to a Union press release, due to "Economical and production guarantees that could not be met by United Bicycles. Thereafter both parties decided to stop the proceedings." However, more likely is that the merger is stopped because of a seizure by Dutch buying association for IBD's, Euretco on the possessions of Union for a total amount of about NLG 1 million (US$418,000; EUR454,000). Euretco's claim is based on the distribution of bicycles made by Union for Euretco to non-Euretco IBD's. A Dutch court recently announced that the Euretco claim is justified and that the buying association can maintain its NLG 1 million claim.

Despite the stop on the merger proceedings with United Bicycles, the Dutch bike maker (production of about 60,000 Union branded bikes per year and about the same number of private label bikes) is still looking for what it calls a 'strategic alliance'. The outdated facility that Union operates in The Netherlands is the main reason behind the search for a 'strategic partner' for which Union now approached Accell Group NV. The third largest bicycle group in Europe with brands like Batavus, Koga-Miyata, Hercules, Sparta and Be-One, is considering participation or a take-over of Union. Accell Group CEO Rene Takens commented, "There are no legal obstacles with regard to Accell's already big market share on the Dutch market. However, Union has to bring additional business for Accell." (JO)

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