The merged business of Bosch Automation and the former Mannesman Rexroth made its long-awaited debut at the recent Hanover Fair. The US anti-trust authorities gave the merger the go-ahead shortly before the show.

Although some details of the merged operation have yet to be finalised, the group will be known as Bosch Rexroth. The new business, a subsidiary of Robert Bosch, has more than 25,000 employees and combined sales of around £2.4bn - more than £1.5bn of this coming from the industrial and factory automation sector.

At the show, Manfred Grundke, director of automation sales for the new business, said that it had "the unique opportunity to assume the world`s leading role in the industrial and factory automation market, as well as in mobile hydraulics".

He asserted that Bosch Rexroth was "the only company that can offer all the technologies of industrial motion, drives and controls, while providing cross-technological solutions".

Grundke reported that despite the economic downturn, Bosch Rexroth had higher sales in the first quarter of this year than in the same period last year and predicted that, in the coming years, the company would grow faster than the market. "We have above-average growth potential in linear motion technology, pneumatics and especially in electrical drives and controls," he said.

Grundke pointed out that because Robert Bosch is not a public company, "we have, in contrast to many competitors, the luxury of developing and implementing long-term strategies without being chased in a different direction every quarter by the analysts".

He is particularly optimistic about the merged operation`s opportunities in the electrical drives and controls sector. "This is a technology field where the products and target industries of Bosch and Rexroth complement each other perfectly," he said. Bosch Rexroth`s goal, he added, is to become the world`s leading supplier in all of the technologies offered by its Drive and Control division.

There are overlaps in some of the two partners` product ranges, especially in pneumatics and drives technologies. But Pekka Paasivaara, head of the drives business, points out that Bosch and Rexroth have traditionally focused on different markets so the overlaps are more in terms of technology than customers.

Paasivaara says that the drives ranges will be combined to form a single platform when the next generation of products emerges, in about two years` time.

More than a third (35%) of the new company`s income is from mobile hydraulics, followed by industrial hydraulics (31%), electric drives and controls (13%), linear motion and assembly (12%) and pneumatics (9%). A new service division is being established.

At present, two-thirds (67%) of Bosch Rexroth`s business in Europe, with 23% coming from the Americas. "We have clear potential for growth in America and Asia," Grundke says. He adds that that the new joint company has three key corporate objectives: customer satisfaction; an appropriate return on gross operating assets; and growth through innovation and globalisation.

Grundke says that customers are increasingly expecting their suppliers to have a systems capability. This "megatrend" which has been apparent in the automotive industry for a while, is now being felt in the machine tools sector. "More and more large customers are coming to us and saying that they require complete modules and a system partnership," Grundke reports.

In response to this, he says, Bosch Rexroth has evolved from being a components supplier to being a motion specialist that can integrate different technologies to solve problems for specific target industries.

The effects of the merger on the UK operations of Bosch and Rexroth are still being decided.