The Machinery Trust Limited had steadily grown in both size and capital since its incorporation in 1893. The company had an understanding with the Linotype Company Limited that allowed them to hire or sell Linotype machines in various countries. This understanding was helped by the fact that many of the Shareholders also held shares in the Linotype Company and both companies shared Directors.

For the first six years of the history the company saw increasing turnover of machines which resulted in growing profits. However, The Boer War did have an effect on its performance and it also found itself having to compete for new customers to supply the composing machines which were being made by the Linotype Company but, sold through a different Agency.

There had been discussions between the two companies, shareholders and other interested parties about how to progress the business forward. It was a worry for the company that any kind of falling out with the main supplier of the composing machine, from which it made most of its profits, The Linotype Co Ltd would have a serious effect on its future profits. In order to resolve this major problem it was suggested that the two companies should merge. Thereby protecting the interests of The Machinery Trust but, also would enable some savings to be made on the duplication of services and operations that were being done by both companies at that time.

The British companies combined would then be more able to compete with its main rivals in Germany and the United States of America. The combined capital of the two companies would allow for better investment in new machines and also would take out of the equation the insecurity and isolation felt by Directors of The Machinery Trust at that time. As a result of this a series of Extraordinary General Meetings were held in July 1903 announcing the plans for the merger of the two companies.

The Machinery Trust Ltd and The Linotype Co Ltd agreed to transfer to the new company Linotype and Machinery Ltd all of their undertaking whilst at the same time taking the opportunity to settle any debt liabilities and obligations from both of the old companies.