HASLINGDEN-based Duralay International has merged with its biggest competitor in a £71 million deal to form the world's largest underlay and carpet accessories business outside of the USA.

Duralay, which employs around 300 people in the Rossendale Valley, has come together with the company behind the Tredaire brand, Gates Consumer & Industrial.

The new company will trade under the banner of the Interfloor Group, whose chief executive will be Larry Dunn, the American recruited recently to run the Duralay operation.

London-based venture capitalist firm, The Rutland Fund, has provided £21 million of investment funding and the Bank of Scotland has arranged a £50 million debt package.

The new chief executive, Larry Dunn, said the merger was good news for both the company and the local area. He said it was business as usual, but he could give no guarantees over new jobs or redundancies.

"Whilst there will inevitably be change over time, our strong message is business as usual," he said. "We have a tremendous opportunity to build a growing business on the back of these world class brands."

Mr Dunn was previously president of Duralay's American subsidiary, Sponge Cushion Inc. Duralay's former managing director Geoff Harrison has retired from the business.

The Interfloor Group now controls around 70 per cent of the UK's underlay market and its brands include Tredaire, Duralay, Hunter, Gripperrods and Floormaster. Duralay's bid last year to buy Gates Consumer & Industrial from Tomkins was referred to the Competition Commission on the grounds that the company would dominate the carpet underlay market.

Patricia Hewitt, Secretary of State at the Department of Trade and Industry cleared the takeover in October 2001.

The merger with the Dumfries-based business has created a company with a turnover of more than £130 million. In addition to its manufacturing and distribution operation in Haslingden, Duralay has factories in America and Northern Ireland and Gates also has a plant in Cannock.

A spokesman for the company said it was unable to give any guarantees over jobs. "Putting these two companies together makes the business more secure and ensures that manufacturing stays in the UK," he said." Haslingden and Dumfries are both integral to the future."