Datatec has called off talks that would have seen subsidiary Westcon acquire the networking distribution activities of Netherlands-based Landis Group.
The talks were called off after due diligence investigations that followed talks spread over two months.
"The discussions have been constructive, but it was ultimately agreed that it was unlikely that we would finalise the terms of the acquisition in the near future," says director David Pfaff, who is to become Datatec`s chief financial officer in August.
Pfaff will replace Robin Rindel, who will remain a director, but take charge of Weston Group`s operations in the Asia-Pacific region.
Pfaff, a chartered accountant who joined Datatec in July last year, will also continue to be responsible for Datatec`s global investor relations and corporate communications.
Pfaff says this comes after Rindel expressed his desire to gain more operational experience.
Despite the breakdown in talks, Datatec says European expansion remains a key goal for both Datatec and Westcon.
"This expansion will be achieved through a combination of acquisitions and organic growth in select European countries," Pfaff says. "This strategy has been successfully implemented in other parts of the world."
Landis`s distribution business is one of the largest in continental Europe, with annual revenues exceeding 450 million euros. It has about 600 staff members.
Datatec had planned to combine the distribution assets and businesses of Landis with Westcon to form the industry`s largest data and voice networking distributor concern.
It announced last month that it had issued 8 million shares to Gensec for R95.8 million cash to help it fund the acquisition.
The Datatec share was trading 20c up at R17.80 on the JSE late this morning.
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