Square D Stock Soars After Buyout Agreement : Takeovers: The electrical products maker accepted a sweetened bid from a giant French company.

A year ago, the stock of Square D Co., a Chicago-based maker of electrical products for construction and industrial uses, was bottom fishing at $33 a share and its chairman was looking for ways to go “global.”

On Monday, Square D shares soared to $87.375 a share, up $6.375, on the New York Stock Exchange and the company had indeed gone global, but it apparently didn’t happen the way Chairman Jerre L. Stead intended.

Square D agreed late Sunday to be swallowed up by French electrical products giant Groupe Schneider after a rancorous 11-week battle that ended with a sweetened $2.23-billion offer.

The deal headed off a confrontation at Square D’s annual meeting that the French suitor was considered likely to win. It came together after the U.S. Justice Department signaled Friday that it wouldn’t try to block a takeover.

It was no defeat for Square D shareholders, however. The final offer of $88 is about one-third higher than the 89-year-old company’s shares have ever fetched, and $10 above Schneider’s original offer in early March.

The merger mates two companies with similar products that are leaders in their domestic markets but are under-represented in each other’s markets. The new entity will be one of the world’s largest makers of electrical products, competing against such firms as General Electric, Westinghouse, Allen-Bradley, Siemens and Emerson.

“The merger forms a business group that is global in spirit and scope,” said Didier Pineau-Valencienne, chairman and chief executive of Schneider, whose $10 billion in 1990 sales makes it six times bigger than Square D.

“It will mean that our two organizations will be able to achieve strategic critical mass in key markets around the world.”

Analysts agreed and said the premium price reflects the importance that Schneider attaches to winning access to the U.S. and Canadian markets, where Square D claims an estimated 30% share. Pineau-Valencienne said he will put Schneider’s small U.S. operations under Square D’s control.

The firms make and distribute such items as circuit breakers, switches and industrial controls for industrial, commercial and residential buildings. Their fortunes are tied to the construction business and manufacturing.

“The price presumes they’re going to be able to get some synergistic benefits,” said Albert E. Turner, who follows the industry for Duff & Phelps in Chicago.

They are such logical partners that Square D’s Stead approached Paris-based Schneider two years ago about a joint venture aimed at winning access to Europe’s markets. That deal was never consummated, but Pineau-Valencienne by then had detailed knowledge of Square D and proposed a friendly takeover at $78 a share.

Square D vowed to remain independent, and Schneider’s move turned hostile. Square D tried to block Schneider in court by arguing that the French firm had used confidential information to launch its bid. It also asked the Justice Department to intervene on grounds that the merger would be anti-competitive.

The refusal of Justice to intervene “was one of the major factors that permitted the negotiations to take place,” Pineau-Valencienne told the Reuters news agency in Paris on Monday.

Both firms agreed to drop all lawsuits, and Square D canceled the annual meeting at which Schneider was attempting to elect its own slate of directors. Still to be decided is the fate of Stead, who joined Square D from Honeywell two years ago.

“I think that’s a very open question,” analyst Turner said. “Schneider would lose something by just getting rid of Stead, but it was such an acrimonious takeover, it’s hard to imagine he has a long-term future there.”

A decade ago, Schneider was a conglomerate making everything from locomotives to ski boots. Under Pineau-Valencienne, the company has been narrowed to one centered on construction and electrical equipment. Analysts have forecast $12 billion in sales and $200 million in earnings for 1991.

Schneider said it expects no factory shutdowns other than any already planned by Square D, and agreed to various protections for the U.S. firm’s 18,500 employees.