Adecco and Randstand under investigation by French authority

 
City A.M. Reporter
STAFFING firms Adecco and Randstad confirmed yesterday that they are under investigation by the French competition authority, with both firms saying they are fully cooperating with the inquiry.

Adecco said in a statement it was informed on Wednesday that it was under investigation, along with certain of its competitors, without naming them.

Dutch staffing firm Randstad later confirmed that the French competition authority had also started an investigation of the company in France.

“Randstad cooperates openly with the authority and we are confident that the investigation will result in a positive outcome,” Randstad said in a statement, without giving details about the investigation.

Randstad is the world’s second-largest staffing firm, and has operations in many European countries, the US, Japan, and other nations.

France is Adecco’s biggest market and the group said in May it was starting to close recent underperformance to the rest of the market there, although conditions remained challenging.

A spokesperson for the firm said it sees no material impact from the probe.

ING analyst Marc Zwartsenburg estimated possible fines for Adecco and Randstad at €29m and €17.7m 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 three to four per cent impact on earnings per share for both firms but the hit would be much smaller if postponed.