LANCASTER Auction Mart is to merge with Kendal, it has been announced.

The farming community is to reap the benefits, say directors of the two companies after reaching agreement on the proposal.

They say it will provide a boost for both businesses, there is no danger to jobs and neither of the marts is at risk of closing down.

A process of 'due diligence' is currently under way, when the companies will look at each other's accounts and ensure everything is in order before the plan is put to shareholders.

Providing they agree, the deal could be completed by the end of March 2005 and the new merged company will kick off on April 4.

A name for the merged business has yet to be decided, but directors say it will reflect both the Lancaster and Kendal elements.

"There's got to be a realisation within the agricultural industry that there are too many auction marts all competing for the same business," says a spokesman.

"Following BSE and foot-and-mouth, and various other problems in agriculture and the farming community, there's not sufficient livestock going through auction marts to ensure viability of the business.

"There has got to be economies of scale in bringing companies together. For the farming community in general it's very, very good news," he adds.

Farmers will be able to use either mart and will only need one account.

John Drinkall, chairman of Lancaster Farmers' Auction Mart, says they were not expecting to make any redundancies among the 10 full-time staff as a result of the merger.

He stresses that farmers will be able to continue to deal with the same staff.