UPDATE:Manroland Mulls Cooperation With Competitors-Board Member

German printing machine maker manroland AG is considering the possibility of cooperation with its competitors, including Heidelberger Druckmaschinen AG (HDD.XE), manroland supervisory board member Werner Dreibus said Tuesday.

"Due to the difficult situation in the industry, (companies) are talking to each other," Dreibus told Dow Jones Newswires on the sidelines of a company event.

A merger between manroland and Heidelberger Druck is just one theoretically possible scenario, he said.

There has been media speculation about such a merger in recent weeks, but experts warn it would face significant competition-related hurdles, as the two companies control around two-thirds of the world market for sheet-fed printing machines.

Dreibus declined to comment on which possible scenarios the company had discussed at a board meeting Tuesday.

Dreibus said no decision has yet been made, but talks could soon reach an advanced stage and a decision could be made after the next supervisory board meeting.

Manroland's employees made it clear Wednesday that any cooperation mustn't lead to the closure of production plants, said supervisory board member Alexandra Rossel. Any merger with Heidelberger Druck would have to be a merger of equals in which manroland wouldn't have to bear the burden, she added.

Printing machine manufacturers like manroland are experiencing their worst downturn in decades as media companies reduce or cancel orders in response to an advertising slump.

German state-controlled bank KfW granted Heidelberger Druck a loan of more than EUR300 million and it got state guarantees of EUR550 million earlier this year. The company reported a fiscal-year loss of EUR249 million and said it would cut one quarter of its workforce of 20,000.

Manroland is the world's market leader in web offset printing machines and has around 8,700 employees. Allianz Capital Partners, a wholly-owned subsidiary of Allianz SE (AZ) owns two thirds of the non-listed company.

Company Web sites: www.heidelberg.com; www.manroland.com

-By Nico Schmidt, Dow Jones Newswires; [phone]; [e-mail]