AMSTERDAM (AFP) — The Dutch temporary employment company Randstad announced Monday that it would take over competitor Vedior to become the second largest human resources company worldwide.
Randstad will pay a 3.51 billion euros (5.14 billion dollars) for Vedior in a mixed deal of cash and shares. Randstad is proposing 0.32759 Randstad shares and 9.50 euros per Vedior share, which values each Vedior share at 20.19 euros, the companies announced.
The takeover, which Randstad chairman Ben Noteboom characterized as "more of a merger," will create the world's second largest temp company with combined revenues of 17.3 billion euros.
"We at Randstad are not going to come in and paint everything blue (the company's signature colour) immediately, that would be value destruction," he explained during a conference call with analysts Monday.
"When you combine two giants you have to be careful that one doesn't dominate the other," Noteboom added.
Together the companies will have over 33,000 employees and a presence in 51 countries.
Noteboom said that "there will not be forced lay-offs."
Randstad's offer has been unanimously supported by the Vedior board.
"This transaction provides our shareholders with a very attractive offer and at the same time the opportunity to participate in the future value creation of an industry leader," Vedior chairman Tex Gunning said in a statement.
Vedior and Randstand now need regulatory and competition approval from Dutch, European and US authorities for the deal. The offer is expected to be formally launched in early 2008 with closing to occur in March or April.
Some analysts here have said there might be problems getting Dutch regulatory approval because the joint company would have over 40 percent of the Dutch market.
But Noteboom said: "We think it is very unlikely that the authorities would not support this deal."
Randstad and Vedior have calculated the takeover will generate cost savings of around 100 million euros annually, partly through synergies and partly because of tax benefits.
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