It seems that the merger of Woolards freight and Timsson transport will not go ahead after all, as the European regulators have blocked the merger plans of the two companies on competition grounds.

The news comes as a blow to Woolards shareholders, who had seen their company's share price soar in the wake of the merger announcement last month. PR manager Peter Larsake said that "the company is taking time to consider its response, and there will be an emergency meeting of the board on Wednesday when we will decide where to go from here." While the board decides, the market has already passed judgement, cutting the share price by more than 40%.

Unions were jubilant, as it was expected that many of the profits from the merger would be achieved by cutting jobs, especially in the Woolards storage depots, which are less modern and efficient than those of Timsson. Woolard's drivers were also relieved as many of them faced redundancy, or the prospect of reduced overtime.

Despite its failure to merge with Timsson, it is unlikely that Woolards will remain independent for long. It lacks the size to enjoy the economies of scale of its larger competitors, but is too big to give its customers personalised service. Unless the firm is able to find itself a market niche in the very near future, it risks a takeover.

Already the predators are circling, attracted by the low share price. The problem is that Woolards is loaded with debt, and any new bidder for the company is unlikely to have the cash pile that made Timsson such as good partner. Expect the shares to fall further.