ACQUISITION OF LEGRAND BY THE WENDEL CONSORTIUM
December 3, 2002 - The Wendel
Consortium, consisting of Wendel Investissement
and Kohlberg Kravis Roberts & Co. (KKR)
will purchase from Schneider Electric its 98,1%
stake in Legrand for € 3.63 billion, corresponding
to a value of € 3.7 billion for 100% of
the capital. This follows the announcement by
the Schneider Electric Group that it would no
longer seek to take control of Legrand.
Immediately following this acquisition, the
Wendel Consortium will file the necessary documents
with the French market authorities to effect
a standing market offer for the remaining shares
outstanding ("garantie de cours")
followed by a squeeze-out offer ("offre
publique de retrait assortie d'un retrait obligatoire").
The delayed completion of the transaction,
combined with the performance of Legrand, which
withstood this year's economic situation, enabled
the company to reduce its financial debt at
the date of this transaction and consequently
reduced the funds to be furnished by the consortium.
The funds brought by the consortium amount
to approximately 1.8 billion euros:
- Wendel Investissement and KKR are investing
equally around € 1 350 billion, and will
hold 75% of the capital. The price paid by
Wendel Investissement is financed through
its own available funds.
- The remaining capital of Legrand is attributed
to different investors interested in participating
in the Wendel consortium: West LB (€
200 million ), HSBC Private Equity Ltd. (€
115 million), Goldman Sachs Capital partners
(€ 100 million), and the Verspieren and
Decoster families, founders of Legrand (€
29 million).
The balance of the transaction is financed
through debt. Terms of the debt issue will be
described when the deal closes.
The WENDEL consortium will reinforce the leading
position of Legrand in the low voltage electrical
equipment, and will implement the principal
strategic orientations defined by the management
team, respecting the integrity of the group.
The acquisition of Legrand meets the strategic
objectives of Wendel Investissements announced
last June during the merger of CGIP and Marine-Wendel:
making investments of more than € 100 million
each, strengthening the proportion of non listed
companies in the group and enabling the company
to exercise its role as active partner by holding
more than 34% of the capital.
To continue its strategy, Wendel Investissements
will have available funds of nearly € 400
million available. Legrand will be the main
non listed shareholding of Wendel Investissements.
Legrand will represent around 20% of its gross
reevaluated assets, diversified in a balanced
manner. Legrand will be consolidated by the
equity method in the consolidated statements
of Wendel Investissement.
Through this transaction, KKR is pleased to
make its first investment in France. This operation
follows numerous investments made in Europe
during the last few years. This transaction
corresponds to KKR's investment policy of taking
majority or minority participation in companies
that have a strong potential of development.
KKR works closely with management over the long
term to design and implement value creating
strategies.
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