European court overturns EC decision on Schneider Electric, Legrand merger

Europe's second-highest court dealt a crushing blow to the European competition authorities on Tuesday with a decision to overturn their veto of a euro 5.7 billion ($5.5bn) deal between the French electrical groups Schneider Electric and Legrand, reports the London-based Financial Times.

10/23/2002


Europe's second-highest court dealt a crushing blow to the European competition authorities on Tuesday with a decision to overturn their veto of a euro 5.7 billion ($5.5bn) deal between the French electrical groups Schneider Electric and Legrand, reports the London-based Financial Times.

In a strongly-worded decision, the Luxembourg-based Court said in last year's decision to block the deal, the European Commission made mistakes in both its analysis and procedures.

The move by the court was seen as an embarrassing blow to European Union antitrust watchdogs. The Schneider-Legrand decision was one of the most controversial merger decisions the Commission has made. Interestingly the same EU antitrust group led by Mario Monti was responsible for blocking the GE-Honeywell merger last year, and the case is also on appeal.

Schneider has sold its shares in Legrand to two investment groups last July for euro 3.6 billion, with a buy-back contingency in case the court ruled in its favour. However Schneider would have to pay out about euro 200 million to the two firms to regain control of Legrand.

Highly placed sources at Schneider Electric have told Control Engineering Europe that it is unlikely the company will pursue the Legrand merger, but it will use the court's decision to try to recover financial losses it has suffered as a result of the EC decision last year. Schneider will pursue smaller acquisitions, such as the one it has announced with Digital Electronics of Japan (Pro-Face) last month.


Control Engineering Daily News Desk
Michael Babb, editor, Control Engineering Europe
mbabb@reedbusiness.com





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