After more than a year of legal battles in European courts, Schneider Electric plans to sell its 98.1 percent stake in Legrand SA, Limoges, France, by implementing the sale contract it signed in July with the KKR-Wendel Investissement consortium.
Schneider first announced its intentions to acquire Legrand SA in January 2001. However, the European courts had two concerns about the bid: its impact on competition in the French electrical market, and the Legrand management team's decision to not support the merger.
Because of the potential that the European courts might veto the deal over these concerns, Schneider began developing an alternate plan to sell its stake in Legrand to KKR-Wendel Investissement.
In late November, the European Commission overturned an appeal issued by the European Court of First Instance that would have cleared the way for Schneider to keep all or part of Legrand.
Schneider Electric disagreed with the European Commission's demands in this decision concerning asset disposals (companies, production assets, brands), and said they were “disproportionate to the aim of maintaining competition in the French market,” according to a company release.
“If Schneider Electric had accepted these demands, the measures would have disorganized and demobilized the companies concerned, affected the economic interest of the planned merger, and reduced considerably the level of forecasted synergies,” said the statement.
Schneider, with approximately $8.7 billion in 2001 sales, owns a stable of well-known electrical brand names that includes Square D, Merlin Gerin, Telemecanique and Modicon. Legrand, which had $2.7 billion in 2001 sales, owns Pass & Seymour, Syracuse, N.Y.; Watt Stopper, Santa Clara, Calif.; Wiremold, West Hartford, Conn.; and Ortronics, New London, Conn.