Australian Industry Group and AEEMA to merge

Stuart Corner
Tuesday, 12 June 2007 11:25

IT Industry - Deals

The Australian Industry Group (Ai) and the Australian Electrical and Electronic Manufacturers' Association (AEEMA) are planning to merge.

The boards of the two organisations have agreed "to commence a process that will consolidate the operations of AEEMA members within Ai Group." They claim that a key outcome of the consolidation will be "a substantial national grouping of both large and small technology driven companies in the electrical manufacturing, electronics, and ICT industries," and that the move will deliver "enhanced and more effective services to companies who are currently joint members of Ai Group and AEEMA as well as to those AEEMA companies who would come into Ai Group for the first time."

The move follows the abandonment, in February 2006, of a planned merger of the AIIA and AEEMA, announced in April 2005. The main driver of that proposed merger was identified as being convergence. AIIA chairman, John Price, said at its announcement that: "Convergence of technologies is driving consolidation of firms in the industry. Because of this, it is appropriate and timely to seriously consider consolidation of industry representation, and ways to deliver a wider range of services to technology-based SMEs across the country."

Abandoning the plan in February 2006 the two bodies said: "While synergies exist between the two membership bases, the core elements of both organisations proved too complex to merge effectively into a structure representing the diverse membership covered by both AEEMA and AIIA...Significant structural challenges were identified during the formal due diligence component of the investigation, and the boards have therefore decided that the best interests of both associations are not served by a formal merger." However the said they had decided instead "to work together on common interests in close collaboration."

AEEMA has played a key role in the National ICT Industry Alliance (NICTIA) since its formation six years ago, providing administrative support. Last month NICTIA, a body with over 20 member organisations, including AIIA, submitted a 10 year strategy statement for the Australian IT industry. The AIIA however did not participate and said it would produce its own document.

AEEMA currently has some 300 members in the electrical manufacturing, electronics and ICT sectors and around a third of these companies are also Ai Group members. Following a period of consultation, confirmation will be formally sought from AEEMA's membership at the October AGM, with the objective of completing the consolidation process by the end of November.

According to Ai President, Trevor Carroll, the combined entity would have "a core high technology group of some 1,000 members...[and] will provide substantial leadership to the further development of Australia's information and communication technology industry, with a particular focus on growing Australia's digital suppliers industry."

It is intended that AEEMA's retiring CEO, Angus Robinson, will work over the next 12 months with the Ai Group CEO, Heather Ridout, to ensure that the consolidation arrangements are finalised, that current commitments to the Electronics Industry Action Agenda are completed, and to oversee the consolidation of the ICT Australia grouping.