Model and collectibles group Hornby Railways has snapped up German model railway accessories distributor Heico Modell

Now they signal to acquire Humbrol/Airfix

Hornby, best known for model railways and Scalextric racing cars, said it was paying a nominal sum for Heico but would take on net liabilities of 200,000 euros. "Our strategy to establish a global model railway and slot racing business is well advanced and this is a vital move that will enable us to grow," Chief Executive Frank Martin said.

The model railway market in Germany is the biggest in Europe and is estimated to be six times larger than the UK market. Heico has 1,200 active customer accounts with independent retailers throughout Germany. Its products include track-side buildings and a range of accessories for model railway wagons. As a result of the recent deal, Heico will be renamed Hornby Deutschland.

Hornby also operates in France, Spain and Italy, allowing it to overcome a tough trading environment in the UK. In June the group attributed an 8% rise in annual profits to £8.2m - albeit on turnover falling 2% to £44.1m - to its overseas expansion. In Germany, Hornby is commonly known under the Lima, Arnold and Rivarossi brands.

Airfix Roadshow

Airfix, founded in 1939 by Hungarian entrepreneur Nicholas Kove, last week appointed Grant Thornton as administrator in the wake of problems with its production partners in France and spiralling debts. The company, which makes kits for assembling miniature war planes, passenger jets, Japanese infantry soldiers and historical figures such as Henry VIII, has already fired 31 of its 41 employees. Its intellectual property and brand names, which include Plasticine, Supercast and Young Scientist, are up for sale, the administrator said.

In the mid-Eighties the brand was bought by Humbrol, the maker of the tiny pots of enamel paints which were applied to the finished models, which acted as a distributor from its Hull headquarters. Meanwhile, the kits themselves were made in France by a company called Heller. Frank Martin, chief executive of Hornby, knows the Airfix business well as the former managing director of Humbrol. A spokesman for Hornby said: "In the interests of Hornby shareholders, we have a duty to consider the opportunity and to register our interest."

However, the company is understood to have reservations about bidding for Humbrol because of problems at its main supplier. Heller, the French company that owns the moulds for Airfix kits, has gone bust and the resulting constraint on supplies pushed Humbrol into financial difficulties. Changes in leisure activities have also played a part, as children spend more time now in front of computers and televisions rather than dedicating hours of patient toil to constructing a Spitfire replica.

"It is very early days yet and they will want to see what is for sale. But Airfix is an iconic brand and Hornby will want to see if it can be salvaged." A deal would bring together two of the best-loved toy brands in Britain.