ELTRON MERGER SCUTTLED : ZEBRA APPROVES DEAL'S CANCELLATION.

Byline: Deborah Adamson and Dave McNary Daily News Staff Writers

The marriage is off between Eltron International Inc. of Simi Valley and Illinois-based Zebra Technologies Corp.

On Wednesday, company officials announced a mutual decision to kill the planned merger because they couldn't agree on how to manage the new company and other issues. Both firms make bar code label printers and accessories.

``We ran a high risk of having a company with two groups seeking to have control,'' said Daniel C. Toomey Jr., Eltron's chief financial officer. ``It really just wasn't going to lead to a real healthy partnership.''

Both sides wanted a company that would equally represent the interests and management strategies and structures of the two partners.

But that didn't seem possible after initial talks between Eltron and Vernon Hills, Ill.-based Zebra.

Since neither company is in financial distress, there was no incentive for either party to capitulate.

``In this case, there was no clear acquirer,'' Toomey said. ``That was the issue we struggled with.''

Last month, both companies announced plans for a stock-for-stock merger worth $680 million. The union would have combined Eltron, which concentrates on the lower-end niche, and Zebra, which makes higher-end products.

Richard W. Davis, a bar code industry analyst and president of Richard W. Davis & Co. of Sunnyvale, said there probably was a clash of corporate cultures and a failure to determine which executive would wield what power.

Toomey said negotiations never moved toward ``due diligence,'' where each company would inspect the other's financial situation.

``The two just didn't mix,'' said Davis. ``The merger was a good idea but I never am surprised when this happens.''