The two makers of the world-famous red multi-function Swiss pocket knives (with the iconic Swiss flag) have merged. Victorinox AG has bought its smaller rival Wenger SA, the two companies announced Apr. 26. The action keeps Wenger from near bankruptcy and insures an iconic Swiss product doesn’t fall into foreign hands, according to Swiss press reports. The action “keeps the Swiss cross in Swiss hands,” said Carl Elsener Jr., Victorinox managing director.

The merger enables Victorinox to strengthen its position in face of foreign competition and provides Wenger SA with the financial backing it needs to continue its activities and restructure its operations, said company officials in a joint statement. Financial details of the deal weren’t released.

Both Wenger and Victorinox also produce Swiss-made watches, sold in the United States under the names, respectively, of Wenger and Swiss Army. According to Victotrinox officials, no changes in operations for either are planned in the immediate future.

The merger saves Wenger’s factory in Delémont, in northern Switzerland, which employs 150 people. There will be no job losses, the companies said. (Victorinox, headquartered in Ibach, employs about 10 times that number worldwide.)

Under terms of the pact, Wenger becomes an independent subsidiary of Victorinox with a new board of directors, including Carl Elsener Jr. Immediate plans call for repositioning Wenger products in the marketplace and “development of products based on the image of the ‘Swiss Army Knife’; developing “synergies in marketing, information technology and promotion” for both companies; and a return to profitability for Wenger in 2006.

Wenger SA has seen a sharp drop in sales (about 43%) since the Sept. 11, 2001 terrorist attacks on four U.S. planes. U.S. security officials have since banned airline passengers from taking any sharp objects, including penknives, onboard in carry-on luggage.

On Apr. 26, Victorinox announced it would purchase its long-time rival for an undisclosed price to ensure Wenger remains Swiss. It would be “unimaginable” if a foreign company bought Wenger and started making those iconic Swiss pocketknives in China or elsewhere, Victorinox spokesman Hans Schorno told Reuters news service.

Victorinox has equipped the Swiss military with pocketknives since 1891 and Wenger since 1901. Both still share that right, although demand has dropped in recent years due to a decline in army personnel. In the past century, the Swiss army pocketknife has been evolved into a multi-functional tool in 400 versions. Its most common accessories are a nail file, corkscrew and toothpick, though some include scissors, mini-saws, tweezers, even computer tools.

Together, Victorinox and Wenger together produce 25.7 million knives annually and export them to 150 countries. One in four is sold in the United States.

JCK