The European Commission has decided to conduct a detailed investigation into Schneider Electric`s proposed takeover of its French rival Legrand. The Commission says the deal needs to be looked at more closely to assess its compatibility with European competition rules in view of the strong positions held by the two companies is some markets - in particular, France, Italy and the Nordic countries.

The Commission is worried that the combined operation - with 94,000 employees and sales of around $11bn - would produce "significant overlaps" in market for the low-voltage distribution products. Although Schneider originally gave undertakings designed to eliminate these competition problems, the Commission says that the undertakings did not achieve this aim in all markets.