Following months of negotiations, Alfagomma announced two weeks ago it had purchased NEH for an undisclosed sum.

NEH Australia services the mining, heavy industry, OEM and distribution markets in the Hunter Valley region of New South Wales.

Under the terms of the agreement, NEH Australia and its subsidiary, Australian Polyurethane Manufacturers would continue to trade under their current names, with APM to distribute non-hose and fitting products.

APM general manager Geroge Salmon said the deal ensured NEH Australia would remain a competitive company in a growing market.

"It's (the manufacturing market) becoming extremely competitive in that a lot of the manufacturers are starting to go direct to the market which, as a distributor, puts a lot of pressure on us," he said.

"Essentially Alfagomma could have done that, so it was a very gentlemanly thing that Alfagomma did."

Salmon said NEH had originally been wary of acquisition offers.

"It was probably with a fair bit of reluctance that we even looked at the offer, but at the end of the day we analysed it and worked a number up to something which was more to our agreement," he said.

"In the end it was a very agreeable settlement."

Alfagomma is a worldwide manufacturer and distributor of hydraulic and industrial parts, with 2003 turnover of EUR150 million.