Merger talks between German press makers Heidelberg and manroland are closer and taking place “at the highest level and with sincerity”, according to German newspaper ‘Frankfurter Allgemeine Zeitung’ yesterday. There’s been no official comment but the newspaper suggests that gaining European Union approval for a merger is now seen as less of an obstacle than first thought. GXpress reported talk of the merger at the end of July, with insiders commenting that it might happen “quicker than we expect”. Those reports from the ‘Platow’ stockmarket newsletter and then German financial newspaper ‘Handelsblatt’ followed following Heidelberg’s annual meeting in Mannheim, Germany, and reported “intense negotiations”. Yesterday’s news was much the same, except that “pressure for action has grown” and with the added news that Heidelberg had brought investment bank Merrill Lynch in as a consultant. manroland has financial institution Allianz – throught to be the instigator of a possible deal – as its major shareholder. Unions are conmcerned about the possibility of further job losses, but the merger would be attractive top shareholders, especially those of “heavily damaged” Heidelberg. On the issue of regulatory approval, FAZ says the merged business would account for about 65 per cent of the global sheetfed market, “which would suggest a veto”, but the companies think the EU Commission would approve a merger subject to conditions. This may be due to the complementary strengths of the two: Heidelberg in sheetfed – having got out of web and newspaper with the sale of those businesses to Goss International – and manroland, dominant in web but a smaller sheetfed player. Reduction of capacity in the industry was “inevitable anyway”. Heidelberg is twice the size of manroland – but thought to be under greater pressure – while the talk in Offenbach (where manroland has its sheetfed plant) is that a merger would be only "on an equal footing". FAZ says a further complication may result from the fact that while Heidelberg is listed on the Stock Exchange, manroland is owned by Allianz Capital Partners and the MAN Group, although Allianz also holds 12 per cent of Heidelberg.