Europe's top appeals court overturned a decision by the European Union Commission to block Schneider Electric SA from purchasing rival electrical equipment maker Legrand SA.
The decision by the European Court of First Instance clears the way for Schneider to keep all or part of Legrand. Schneider must now decide whether to retain Legrand or proceed with its agreement to sell the business to a private equity consortium, a deal prompted by the Commission's ruling.
Schneider agreed in January 2001 to buy Legrand for $7 billion. Late in 2001, the Commission blocked the purchase, leading to Schneider's agreement in July 2001 to sell Legrand to the Wendel Consortium, which consists of Kohlberg Kravis Roberts & Co. (KKR), a private equity firm, and Wendel Investissement, a French conglomerate.
Under the terms of the proposed deal with KKR and Wendel, Schneider could still hold onto Legrand, if it won its appeal. Schneider would have to pay a breakup fee to the consortium.
Henri Lachmann, the Schneider chief executive who negotitated the purchase of Legrand last year, will discuss the situation with the board of directors on Oct. 25.