COMMENTARY: Tribute on Merger Talks Breakdown
I decided I’d call Heidelberg who I know pretty well. They told me that unlike manroland who are a private company, that Heidelberg as a publicly quoted and listed company couldn’t comment on such a situation. So I thought that I’d look at this and give my opinion on what may be happening.
One has to consider that Allianz came into manroland some years ago when MAN was largely divesting of its ownership in what was then MAN Roland. My view is the venture fund side of Allianz thought it saw the opportunity to rapidly capitalize on an investment in the new manroland on the basis of a rapid move to float the company or sell it on. Venture funding companies are always looking when they go into an investment to what are their options in the future are to get out of the investment with a profit. I personally thought their due diligence at the time was very flawed if they saw a real profit opportunity in becoming the major shareholder in manroland. The market was already going down at that time and Heidelberg had already started its move into the VLF sheet fed press area where MAN Roland was the major player.
The recession coming soon after this investment did not help and we soon saw the major offset press manufacturers getting into difficulty as orders slowed up. For manroland it was particularly difficult as it was the market leader in newspaper web offset presses and no area of the publishing and printing market has been as heavily affected as newspapers.
Meanwhile Heidelberg had introduced its VLF sheet fed presses aimed at the profitable packaging market, and from what I understand it has in terms of orders taken over market leadership in this area, to the detriment of manroland.