UPDATE 2-France launches competition probe into staffing firms

Thu Jul 11, 2013 9:36am EDT

* Adecco, Randstad both cooperating with investigation

* Adecco sees no material impact

* Randstad hopes for positive outcome

* Shares slightly underperform

ZURICH, July 11 (Reuters) - The French competition authority is investigating staffing companies including Switzerland-based Adecco and Dutch group Randstad, the companies said on Thursday.

Adecco, the world's largest staffing company, said it and some of its rivals were under investigation concerning alleged violations of French competition law, adding it was fully cooperating.

A spokesman said Adecco did not expect the investigation to have a material impact on the firm in its biggest market.

Randstad, the number two staffing firm, also said it was cooperating and was confident of a positive outcome.

A spokesman said he assumed the investigation concerned the unauthorised exchange of information, adding officials from the French authority had visited Randstad's office in Paris on Wednesday, seizing some documents.

A French competition authority spokesman confirmed that searches had been carried out, but would neither identify the companies targeted nor specify what was being investigated.

ING analyst Marc Zwartsenburg estimated possible fines for Adecco and Randstad at 29 million euros ($37.3 million) and 17.7 million euros ($22.8 million) respectively, extrapolating those figures from fines paid after an investigation in 2003-2004 that was settled in 2010.

Zwartsenburg said that would translate into a 3-4 percent impact on earnings per share for both firms but the hit would be much smaller if postponed as in the previous case.

Adecco was slapped with a 32.5 million euro fine in 2009 for colluding with rivals on pricing for key clients such as engineer Alstom, power group EDF and retailer Galeries Lafayette.

Manpower, Adia and Vediorbis were also sanctioned, with total fines for all four temporary staff firms reaching 94.4 million euros.

That decision followed raids carried out by the competition authority in 2004 and an in-depth investigation. Randstad bought Vediorbis parent Vedior in 2008.

Shares in Adecco were up 1.4 percent by 1308 GMT, while Randstad shares were 0.6 percent higher. The European industrial goods and services index was up 0.4 percent.

Adecco said in May it was starting to close recent underperformance to the rest of the market in France, although conditions remained challenging.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.