Will Arrow make a play as Avnet buys Premier Farnell?

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Avnet’s counter offer for Premier Farnell has surprised the market. The company topped Datwyler’s bid by 12% and the Premier Farnell board was obliged to accept it. Interestingly, documents released as part of the deal show discussions between Avnet and Premier Farnell were underway as early as January 2016.

While Datwyler was something of a ‘left field’ candidate, you can’t categorise Avnet in that way. But while Avnet is a broadliner, focused more on volume and production, Premier Farnell is a member of the ‘high service’ community, looking to address the design phase. On paper, the acquisition is complementary.

Over the last couple of years, the boundary between broadliner and high service has become less clear.

In an interview with ex Digi-Key president Mark Larson last year, I asked him whether the divide might disappear and whether there was a chance that a big company from one camp might buy one from the ‘other side’?

“There’s no question that if you take a traditional distributor, such as an Arrow or an Avnet, their position would be strengthened by aligning with or acquiring a company that’s more focused on designers,” he said. “But from the customer’s point of view, I’m not sure there would be advantages in such a move; they want and expect a certain amount of competition in the market.”

Acquiring Premier Farnell also means Avnet gets its hands on the company’s US network Newark Electronics.

So will Arrow look to make a parallel move? Digi-Key and Mouser are probably out of reach, so might it want to acquire Premier Farnell’s rival Electrocomponents and its RS Components business?