European Commission decision
The European Commission has announced its final decision and, in line with the Competition Commission’s department recommendation, has prohibited the acquisition of control of Legrand by Schneider Electric.
Schneider Electric and Legrand have been informed of the decision, whose validity they contest. Throughout the process, they have tried to successfully complete the merger, which offers undeniable strategic and industrial benefits for both companies—for their shareholders, their customers and their employees.
This merger between two companies with strategically related business activities is designed to build a major global enterprise and would not create or strengthen a dominant position in the European market as a whole, nor in any of the Member States.
In addition, the two companies emphasize that they complied with the different steps in the Competition Commission procedure. After receiving the statement of objections on August 3, 2001, they submitted, on a timely basis, the information requested and responded to the objections raised by the competition authorities.
The divestment solutions proposed by the two companies, particularly in France and Italy, more than eliminate all of the market share overlaps created by the merger for the products and countries concerned. In fact, these solutions would create even stronger competitive conditions than before the merger project, notably in France and Italy.
Schneider Electric and Legrand also note that their proposed divestment solutions—totaling some 400 million, primarily in France and Italy—were approved in principle on September 14, 2001 pending certain clarifications and market tests. This approval was confirmed on September 17. Additional proposals submitted on September 24, 2001 provided clear and durable solutions to the problems of restoring competition that were reflected in the market tests.
To protect the rights of shareholders and employees, Schneider Electric has decided to prepare all the appropriate means of appealing the decision to the Court of First Instance of the European Communities in Luxembourg to ensure that all of its rights are recognized. At the same time, it will, as proposed by the european Commission "to examine with the Commission the practical arrangements for restoring effective competition".
Although Schneider Electric holds 98% of Legrand’s shares following the public offer, it notes that the merger has been prepared but that no measures have been taken to initiate it in any way. Schneider Electric will scrupulously comply with this commitment in the weeks ahead.