Tech Data (UK) is to buy networking distributor Azlan in a £139.6m deal which Azlan hopes will protect it in an uncertain market.
The distributor said that its value-add networking business had been successful in the light of tough economic conditions, but that acquisition by Tech Data (UK) would safeguard its future.
Azlan chairman Barrie Morgans said that in an uncertain market the best place for Azlan would be as part of a bigger business.
"With the uncertainty of the timing of any upturn and the trend towards more globalised competition we believe Azlan and its employees will benefit from being part of a larger global IT business," he said in a statement.
As a European value-add distributor, Azlan's portfolio is complementary to Tech Data's activity on the continent.
Steven A. Raymund, chairman and chief executive of Tech Data, said: "Azlan represents an ideal strategic match for our European operations.
"Our respective business models are highly complementary yet distinct in terms of product focus areas, customer bases, distribution capabilities and overall service offerings."
EuroLAN analyst Keith Humphreys predicted that the move will create a strong Cisco business if it goes through, but warned that the brands should be kept separate.
"If Tech Data keeps C2000 and Azlan autonomous but merges the networking aspects it will benefit both companies," he said.
The deal will also be good for Cisco, which is a partner of both distributors, and will lower its costs further, Humphreys added.
"This can only help Cisco because the combination of two of its distribution partners will bring its costs down further."
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