Acquisition Potpourri

Electronic News, May 24, 1999 by Heidi Elliott

Las Vegas-To acquire or not acquire was the question facing electronic component distributors at last week's Electronic Distribution Show here. Distributors agreed that consolidation in the industry will continue - but that's about the only common denominator.

Arrow Electronics Inc., which leads the industry with more than 40 acquisitions in its push to become global, isn't actively looking, said Stephen Kaufman, chairman and chief executive officer, but does plan to fill in any gaps. "For a while it was an imperative (to make acquisitions). That's no longer the case," Kaufman said. However, he added, "We will always seize opportunities that are presented to us." Arrow has made two recent acquisitions. One, announced last week, was in Brazil (see story, page one), another was made in Switzerland.

Avnet Inc., which, like Arrow, has made several acquisitions to make itself global, (it too ventured into Brazil last week) is still looking to shore up some geographic regions, notably Asia. "It's a growth market. We need to be where our customers are," said Philip Gallagher, Avnet executive vice president of sales and customer marketing, noting that major contract manufacturers are located in the region, as is telecom giant Ericsson.

Stephen Witmer, a spokesman for VEBA Electronics Inc., Santa Clara, Calif., said parent company, Germany's VEBA AG, recently announced it would focus the majority of its capital on core businesses. Non-core businesses, including the electronic component distribution group, have to fund their own growth. Witmer said VEBA would consider small acquisitions, but will probably not make any sizable acquisitions and the company has denied it is looking to sell its distribution business.