The French government has blocked Swiss company ABB from acquiring France-based Legrand, which generates nearly $1 billi

According to media reports, Legrand has been the acquisition target of its major competitor, the Swiss ABB Group, over the past six months. It is stated that ABB’s acquisition attempts were unanimously rejected by Legrand’s board of directors twice and explicitly opposed by France’s Ministry for the Economy, Finance and Recovery (Bercy Group). Finally, ABB’s chairman assured France’s Minister for the Economy at the end of July this year that the group would abandon its plan to acquire Legrand, bringing this strategic acquisition drive centered on data center business to a temporary halt.

This unsuccessful acquisition not only revives the historical episode of Schneider Electric’s EU-vetoed acquisition of Legrand in 2001 but also profoundly reveals the ambitions and challenges of European industrial giants in pursuing intense strategic integration in the fast-growing data center infrastructure market, driven by the global AI wave.

The global electrical equipment market is dominated by four giants: Schneider Electric, Siemens, ABB, and Legrand. Fueled by the AI wave, the explosive growth of the data center infrastructure market has increased the total market value of these giants by over €150 billion.

In the current data center market, Schneider Electric and Siemens hold leading positions with their profound accumulation:

• Schneider Electric: Its product portfolio covers software, storage racks, and cooling systems. It is estimated that data center orders will account for 24% of its total orders in 2024, making it an industry leader.
• Siemens: Its Smart Infrastructure Group has achieved profitable growth and maintains significant advantages in automation and energy management.

Although ABB achieved a record annual revenue of $32.9 billion in 2024, and data center orders accounted for 15% of its robust Electrification division (worth $16.4 billion), its data center business still has a strategic gap compared with Schneider Electric and Siemens in terms of vertical integration and growth rate.

To achieve the ambitious goal of "sharing the market equally with Schneider Electric and Siemens", ABB needs to quickly acquire high-growth, high-value-added data center-specific technologies and market share through external growth. The strategic acquisition of Legrand was regarded as a fast and efficient path.

As a model of successfully shifting to a data center strategy in response to the decline in European residential construction, Legrand provides precise supplementary value for ABB. Its strategic value is reflected in the following four core aspects:

Data center orders account for 20% of Legrand’s 2024 revenue (€9.29 billion), double the proportion in 2019—highlighting its strong growth momentum and strategic execution capabilities. The growth of its first-half net profit (8.7%, reaching €628 million) is also mainly driven by its data center business.

Core components of data centers include circuit breakers, intelligent controllers, and busbars. Legrand’s recent acquisitions have precisely targeted these high-value-added areas:

• Power Busways: The acquisition of North America’s leading "Power Bus Way" (with annual revenue of approximately €70 million) and Asia’s leading "Linkk Busway Systems" has significantly strengthened its expertise in data center power busways.
• Power Quality Management: The acquisition of "Avtron Power Solutions" (valued at over $1 billion) has granted Legrand global leadership in load banks and power quality solutions. With 50% of Avtron’s revenue coming from data centers, this acquisition has equipped Legrand with high-end, specialized power quality management capabilities.

Legrand’s acquisition targets (such as Power Bus Way and Avtron) have strong business presence in the United States and Canada. This would provide ABB with a shortcut to enter the high-growth, high-value North American data center market, directly enhancing its competitiveness against U.S. rivals like Eaton.

Legrand forecasts its 2030 sales will range from €12 billion to €15 billion, reflecting the market’s long-term confidence in its existing data center strategy and its future growth potential.

If ABB had successfully acquired Legrand, it would have created strong synergies, sufficient to build a global data center giant on par with Schneider Electric and Siemens:

This unsuccessful acquisition has once again drawn attention to France’s protection of its domestic "strategic assets" and antitrust issues. As early as 2001, Schneider Electric’s €5 billion acquisition offer was rejected by the European Commission. In the current AI-driven industrial competition, Legrand’s expertise in the data center field makes it an extremely attractive target.

Although ABB’s acquisition drive has been blocked, its strategic goal of challenging Schneider Electric and Siemens will remain unchanged. Through integration, ABB can gain strategic leverage to directly compete with these two major rivals, thereby rebalancing market power in the global electrical equipment and digital infrastructure sector. It is foreseeable that strategic M&A and market integration centered on data centers, power, and digital infrastructure will remain the main theme of Europe’s industrial sector in the coming years.