Rexel & Hagemeyer?

Bloomberg.com reported on Friday, July 14, that Hagemeyer’s stock price “climbed 9.7 percent. Shares of the world’s third- largest electrical equipment supplier rose the most in almost a year July 12 on speculation Rexel SA might make a takeover offer. “Rexel might be interested,” said Marcel Hooijmaijers, a Kepler Landsbanki analyst in Amsterdam, who has a “buy” rating on the stock. The two are a good fit.” (article)

While this could be a good fit electrically for Rexel, giving them signifcant strength in the Carolinas, Virgina and increased strength in Maryland (think the old Tristate and Cameron-Barkley), we wonder if the deal might be for only Hagemeyer’s electrical group or if Rexel is looking to get into other industries (safety – which is a natural complement for the industrial customers and could be expanded to other Rexel locations).

If this acquistion happens, Rexel will clearly be the #1 electrical distributor in the U.S. based upon locations and revenue while also positioning the company for increased customer share through the acquired capabilities of the Hagemeyer’s safety and industrial divisions. It wouldn’t be inexpensive, but Rexel has shown that it has deep pockets (GE Supply acquisition) although this would be much bigger as Hagemeyer had 2006 revenue of over 6 billion euros…or maybe Rexel only wants to buy Hagemeyer North America which is 1.4B euros (2006) and 345 locations.

Only time will tell. Distributors in the Southeast and MidAtlantic should stay close to leading manufacturers who typically hear more sooner.