Brussels, 6 February 2004
Commission gives green light to the acquisition of MGE by Schneider
The European Commission has authorised under the Merger Regulation the proposed acquisition of MGE UPS Systems S.A., a French company which makes power supply devices, by French electrical equipment maker Schneider S.A. The deal does not raise any competition concerns.
On 23 December, Schneider Electric Industries S.A. notified the Commission of a plan to buy MGE UPS Systems S.A., a company which produces systems to ensure power supply continuity (so-called UPS(1) devices). These devices allow systems to keep running when the primary power source fails due, for example, to power blackouts. Schneider Electric Industries S.A. is a subsidiary of Schneider Electric S.A.
The Commission's investigation focused on the vertical integration since the two companies' activities are largely complementary, and particularly the question of whether customers could be shut out from some Schneider's components which are required for the manufacturing of UPS devices. However, the Commission concluded to the absence of competition concerns since Schneider already supplies most of MGE's needs in this field, MGE's purchases represent only a small proportion of Schneider's sales and there are other important companies that produce these components including Legrand, Hager, ABB, Siemens and General Electric.
The Commission also analysed to what extent Schneider could use its influence in the wholesale distribution network to encourage distributors to buy MGE's low voltage UPS devices as opposed to competitors' products. It concluded to the absence of likely harm since MGE's market shares in all relevant markets are below 40% and the vast majority of low voltage UPS devices are, in any case, sold through other important distribution channels where Schneider does not have any ability to compel wholesalers to buy its products.
(1) Uninterruptible power system