Forklift News - BRAMBLES UNVEILS ITS GRAND PLAN

SYDNEY, Australia -- If everything goes to plan, by 2002 Brambles Industries' only association with forklifts and equipment hire will be a part-share in a merged UK company.

Brambles hopes to exit all its equipment rental activities by the end of 2001.

Brambles and GKN plc, headquartered in the UK, are in talks to merge their industrial services activities, which are currently run 50-50 in the UK. The merged entity has been estimated at A$17 billion.

The deal will include GKN's materials handling business, Interlake Material Handling, which specialises in pallet and container racking, storage and conveyor systems. Brambles' part ownership of the new company would be its only materials handling operation.

Brambles plans to sell its Gardemann equipment rental business in Germany by June. Chief executive John Fletcher would not name the potential purchaser, but said the business had "suffered from an extremely competitive market".

Last December Brambles sold its French forklift operation. Last November, Nacco Materials Handling Group bought Brambles' 5000-unit forklift fleet in Australia. While Brambles has not flagged a sale of its US forklift business, the company said in its half-yearly report, issued on February 22, that "equipment rental activities continued to suffer from structural changes in the market, with profits falling significantly".

Forkliftaction.com understands United Rentals Inc, the USA's largest equipment rentals company, may be looking to purchase the Brambles US operation.

United Rentals has just ended talks to acquire Neff Corporation, another US rentals company (see accompanying news item). The proposed deal would have been worth US$314 million. United Rentals decided not to further extend an informal proposal to Neff after its February 26 acceptance deadline.

Neither Brambles nor United Rentals would comment.

Mr Fletcher blamed equipment rentals for Brambles' poor half-year results, saying "long-term structural change in the global equipment rental sector" had led the company to an A$194 million pre-tax write-down in the value of its equipment rental businesses. "Divestment options are being explored," he said.

The half-year to December 31 showed only a A$1.5 million increase over 1999 in after-tax profit to A$181.9 million.

Brambles and GKN have released identical statements announcing discussions on the proposed "nil premium merger" of their industrial services activities, including Chep pallet and Cleanaway waste management businesses they have operated as joint ventures in the past.

The merger depends on legal, taxation, accounting, regulatory and other issues.

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