AIIA and AEEMA abandon merger plans

Stuart Corner
Friday, 24 February 2006 10:20

IT Industry - Strategy

The Australian Information Industry Association (AIIA) and the Australian Electrical and Electronic Manufacturers' Association (AEEMA) have abandoned their planned merger, announced in April last year, and decided instead "to work together on common interests in close collaboration."

The primary reason given for the proposed merger on its announcement was convergence. AIIA chairman, John Price, said: "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."

Following announcement of the merger a joint steering committee was established to oversee the investigation and assessment of the proposal. Its conclusion was that the merger was unlikely to provide the same level of support for members as that which currently exists. "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."

Both organisations say the assessment process was "very positive" and the AEEMA board has approved an immediate restructuring, which has seen the current operational focus on the traditional divisional structure - electrical manufacturing, electronics and ICT -become subservient to new 'front line' program areas of technical/regulatory, business development, and industry campaigns as the central 'drivers' of AEEMA's future approach.

AEEMA has recently appointed three new senior line managers to direct these operational areas. CEO, Angus Robinson said: "The new structure also provides for a more effective level of future collaboration with the AIIA and other ICT interest groups through the mechanism of the National ICT Industry Alliance, as well as creating a framework for further industry consolidation."