(25/08/2003) Schneider Electric enters into an agreement to strengthen its Asia Pacific presence in Electrical Wi

(Rueil-Malmaison, August 25, 2003) - Schneider Electric and Clipsal Industries (Holdings) Limited have signed an agreement for the formation of a 50/50 Joint Venture (JV) to manufacture and distribute Electrical Wiring Devices in Asia. Simultaneously, Schneider Electric has signed an agreement to acquire ownership of the Electrical Wiring Devices business of Gerard Industries Pty. Ltd in Australia from Clipsal Industries and the Gerard Family. These two transactions respond to three key aspects of Schneider Electric's strategy: the enhancement of its presence in Asia Pacific, the acceleration of growth in the Residential and Buildings markets and the widening of its offer in the Electrical Wiring Devices field. Joint Venture with Clipsal Industries (Holdings) Limited The JV will be formed between Schneider Electric and Clipsal Industries, which currently holds a long term exclusive right to the Clipsal trade mark for Asia. Clipsal Industries will contribute to the JV all its electrical wiring devices and installation systems businesses in Asia. Schneider Electric will contribute to the Joint Venture its Asian operations in electrical wiring devices. The JV will have a significant presence in China, Hong Kong, Singapore, Malaysia, Indonesia, Vietnam and Middle-East and is expected to generate, on a pro-forma basis, annual revenues of around E100M. Corporate governance and management principles are defined in a JV Agreement, which also contains put and call options stipulating the terms and conditions of a future acquisition by Schneider Electric of the remaining 50% of the JV's share capital. The JV company is to be incorporated in Hong Kong and will be called Clipsal Asia Holdings Limited. To avoid any future confusion, Clipsal Industries will change its corporate name immediately following completion of the transaction. Acquisition of Gerard Industries Electrical Wiring Devices Business On completion, Schneider Electric will acquire Gerard Industries' electrical wiring devices business (located in Australia, New Zealand, South Africa and India), as well as the worldwide ownership of the Clipsal brand name, including all related intellectual property. This business presently generates annual net sales of around E250M, with a pro-forma operating income of around 14%. Both Transactions Conditional and Interdependent The completion of both transactions are inter-dependent and subject to various conditions, including regulatory approvals (such as anti-trust clearances in Australia, New Zealand and South Africa) as well as Clipsal Industries' shareholders approval. The final consideration for each transaction will be confirmed following a post-completion audit. Business Prospects The JV will continue selling the Clipsal products in Asia, whilst Schneider Electric will sell these products, mainly through Gerard Industries' existing distribution channels, outside of Asia. Schneider Electric Chairman and CEO, Mr. Henri Lachmann commented 'The formation of the JV will enable Clipsal Industries and Schneider Electric to join forces in rapidly growing Asian markets, while the acquisition of the Gerard Industries Electrical Wiring Devices business will complement Schneider Electric's offer in the highly competitive Pacific market. These are two key areas where Schneider Electric aims to expand its presence in the Residential and Buildings markets.' Transaction Impact The acquisition of Gerard Industries Electrical Wiring Devices business will be satisfied by a cash payment of E450M. The share in the joint venture with Clipsal Industries will be financed through the contribution of assets, the sale of Schneider Electric's current 18,7% stake in Clipsal Industries and a E5M cash outlay. The two transactions are expected to have a combined neutral impact on Schneider Electric's Earnings Per Share (after goodwill amortisation) in 2004 and a positive effect from 2005. Schneider Electric Give the best of the New Electric World To everyone, everywhere, at any time Schneider Electric, the world's Power & Control specialist with leading world-wide brands such as Merlin Gerin, Square D and Telemecanique, offers a comprehensive range of products and services for the following markets: residential, buildings, industry and energy and infrastructure.Schneider Electric's 74 800 employees generated sales of E 9.1 billion in 2002 through 13,000 sales outlets in 130 countries. Investor Relations : Schneider Electric Alexandre Brunet Tel. +33 (0)1 41 29 70 71 / Fax +33 (0)1 41 29 71 42 www.schneider-electric.com Euroclear : 12197 Media contact : Schneider Electric Véronique Moine Tel. +33 (0)1 41 29 70 76 / Fax +33 (0)1 41 29 71 95 Media contact : DGM Michel Calzaroni Olivier Labesse Tel. +33 (0)1 40 70 11 89 / Fax +33 (0)1 40 70 90 46 (C) Companynews