More merger mess

21 October 2003

The French electrical components group is suing the European Commission for E1.5bn over the blocking of its merger with Legrand. The lawsuit won’t be simple to win. But it keeps pressure on the Commission to reform its merger review procedures.

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Schneider Electric is suing the European Commission for at least E1.5bn over its failed merger with rival Legrand. The EC blocked the tieup after Schneider had already bought a 98% stake in the company. Last October the Court of First Instance overturned the Commission's decision.

Following the Commission's decision, Schneider sold the stake in Legrand to a consortium led by Kohlberg Kravis Roberts and Wendel Investissement, taking a E2bn loss.

Two other blocked mergers – Air Tours' takeover of tour group rival First Choice and packaging group Tetra Laval's takeover of Sidel were also overturned by the court last year.

Air Tours, now MyTravel, launched a lawsuit in June against the European Commission over its decision to block its merger with First Choice in 1999. MyTravel is seeking E518m in damages.

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