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Rexel: The Invisible Infrastructure of the Energy Transition
I. Introduction & Episode Roadmap
Picture a construction site anywhere in the developed world—Paris, Dallas, Sydney, Shanghai. Cranes swing overhead, concrete mixers churn, and electricians scramble to wire buildings that will define cityscapes for decades. But before any switch gets flipped or any outlet hums with power, something invisible must happen: someone has to supply the 200,000-plus SKUs of wires, conduits, breakers, switches, and sensors that make modern electricity possible.
That someone, increasingly, is Rexel.
While investors chase the glamorous players of the energy transition—Tesla, solar panel manufacturers, wind turbine makers—they often overlook the quiet giants that make electrification physically possible. Rexel SA is a French multinational corporation headquartered in Paris, specializing in the professional multichannel distribution of electrical products, solutions, and services for the energy world. Think of them as the Fastenal or Grainger of electrical equipment, but with a global footprint and a strategic positioning that places them squarely at the intersection of every major energy trend.
The "picks and shovels" thesis for electrification couldn't be more apt here. Everyone talks about EVs, solar installations, and smart buildings—but who actually supplies the wire, conduit, and components that make it all possible? The answer increasingly points to the massive distributors that sit between manufacturers like Schneider Electric and the electrical contractors who wire our homes and businesses.
The company operates in 17 countries across three continents, with approximately 49% of its activities in Europe, 44% in North America, and 7% in Asia-Pacific, through a network of over 1,875 branches and 68 logistics centers. That's nearly 2,000 locations where contractors can walk in, order parts, get technical advice, and keep projects moving.
What makes Rexel's story remarkable isn't just its scale—it's the journey. From a fragmented collection of French regional distributors in the 1960s, to a private equity-fueled transformation machine, to today's publicly traded energy transition play, Rexel has reinvented itself multiple times. The company has survived ownership by timber traders, luxury goods conglomerates, and some of the world's most sophisticated private equity operators. Each chapter added capabilities, geographic reach, and strategic clarity.
This is the story of how a mundane distribution business became a critical artery of the global energy transition—and what that transformation reveals about the future of the electrical industry.
II. Origins: The Birth of French Electrical Distribution (1967-1990)
In 1967, as France was still rebuilding from World War II and modernizing its infrastructure at a breakneck pace, a new kind of company emerged from the need to organize chaos. The Rexel Group is the descendant of Compagnie de Distribution de Matériel Électrique (CDME), which was created in 1967 by Compagnie Lebon. CDME was the result of the merger of four companies: Revimex, Facen, Sotel and Lienard-Soval.
The electrical distribution landscape of post-war France was a patchwork of family-owned businesses, regional specialists, and informal networks. Construction was booming, but there was no organized way for electrical contractors to source the thousands of products they needed. It specialized in electrical equipment sales and grew in France through the acquisition of regional family businesses.
This roll-up strategy would become the defining characteristic of the electrical distribution industry for the next half-century. The logic was simple: fragmented family businesses lacked purchasing power, logistics sophistication, and professional management. A centralized distributor could offer better prices from manufacturers, faster delivery, and technical expertise that smaller operators couldn't match.
By the late 1970s, CDME was looking beyond its core business. In 1978, the company launched a professional electronic and computer equipment distribution branch and diversified into the industrial supplies business. This early diversification showed ambition but also created strategic diffusion that would take decades to resolve.
The company's first major milestone came in 1983, when CDME joined the unlisted securities market of the Paris Stock Exchange. The company then held more than 20% of the market share in France and 6% worldwide. These numbers established CDME as the undisputed leader in French electrical distribution—a position it has never relinquished.
International expansion followed quickly. Beginning in the 1980s, CDME began its expansion into European and international markets by setting up in Cyprus, Saudi Arabia, Portugal, Benelux, West Germany, Singapore and Canada. The geographic diversity was somewhat scattershot, reflecting opportunistic deals rather than strategic planning.
In 1986, it began doing business in the United States. At that point, the company had 350 points of sale, 65 of which were abroad. This early U.S. footprint would prove crucial—America represented the world's largest electrical distribution market, and establishing a presence there positioned CDME for future growth.
Then came the first of several ownership changes that would define Rexel's trajectory. The Pinault Group acquired CDME in December 1990 and became its main shareholder. The electrical equipment distribution subsidiary accounted for 38% of the Pinault Group's total sales. CDME was then the leading distributor of electrical equipment in France, Belgium and Portugal.
François Pinault, the timber trader turned retail magnate, saw something in CDME that others might have missed: a scalable distribution platform with strong cash flows and consolidation potential. The acquisition marked the beginning of an era of more aggressive expansion.
For investors considering Rexel today, this origin story matters because it established patterns that continue to define the company. The roll-up strategy, the tension between diversification and focus, the importance of scale in a fragmented industry—all of these themes originated in CDME's first two decades.
III. The Pinault Era & Birth of the Rexel Brand (1990-2005)
The Pinault Group's acquisition of CDME wasn't just a financial transaction—it was the beginning of a complete identity transformation. In June 1993, CDME joined forces with Groupelec Distribution. That is when the group took on the name Rexel.
In June 1993, CDME merged with Groupelec Distribution (the French market Number 3) and changed its name to Rexel. This wasn't a small deal—it consolidated the top two French players, creating a dominant national champion with unparalleled purchasing power and market coverage.
The new Rexel brand represented a deliberate attempt to create a pan-European identity that could transcend national borders. Unlike "Compagnie de Distribution de Matériel Électrique," which was obviously French, "Rexel" was short, memorable, and worked across languages.
During the 1990s, management made a critical strategic decision to refocus the business. The company re-centered its operations on the distribution of electrical equipment. The diversification into electronics and industrial supplies that had begun in the 1970s was deliberately unwound. In the 1990s, the group refocused its business on the distribution of electrical supplies selling most of its professional electronical distribution business in 1988 and in 1994 its subsidiary GDFI, the leading French distributor of industrial supplies.
This focus would prove prescient. By concentrating on electrical distribution, Rexel could build deeper supplier relationships, develop specialized expertise, and invest more heavily in the logistics infrastructure that would become its competitive advantage.
The U.S. market presented both opportunity and challenge. Rather than build from scratch, Rexel took the acquisition route. The company's entry came through Willcox & Gibbs, a company with an unusual history. For more than a century, Willcox & Gibbs had been a manufacturer and distributor of industrial sewing machines before diversifying into electrical distribution. By acquiring a controlling stake, Rexel gained immediate access to an established American operation.
Gradually, the Group's subsidiaries undertook the brand name: Willcox & Gibbs in the United States became Rexel Inc. in 1995, Rexel Italia was created in 2000 from the merger of 10 Italian subsidiaries, and the first joint venture was created in China under the Rexel Hailongxing name.
This period also saw the gradual crystallization of Pinault's broader strategy. The Pinault Group evolved into Pinault-Printemps-Redoute (PPR), acquiring the Printemps department store chain and La Redoute mail-order business. As the conglomerate grew more complex, questions emerged about where electrical distribution fit in the portfolio.
In 2001, Rexel generated 75 percent of its revenues abroad. At the time, the Group was world leader in its sector with 1,900 sales outlets and 25,000 employees in 33 countries, and it was actively pursuing its acquisitions policy.
But the strategic misfit was becoming apparent. PPR was pivoting toward luxury goods, acquiring stakes in Gucci and later Yves Saint Laurent. François-Henri Pinault, who took over from his father, saw the future in fashion and lifestyle brands, not in electrical conduit and wire.
The decision to sell Rexel was inevitable—the only question was timing and price.
For investors, the Pinault era demonstrates both the benefits and limitations of conglomerate ownership. On one hand, Rexel gained access to capital and professional management that accelerated its growth. On the other hand, it was never core to PPR's strategic vision, which limited investment and constrained ambition. The eventual sale to private equity would prove transformative in ways that continued conglomerate ownership never could have been.
IV. INFLECTION POINT #1: The Private Equity Buyout (2005-2007)
In the private equity world, 2005 was a year of mega-deals and record-breaking transactions. Cheap debt, confident sponsors, and willing sellers combined to create an explosion of buyout activity. Into this environment stepped a consortium that would reshape Rexel's future.
The firms purchased Rexel for approximately $3.7 billion. The acquisition represents the third largest private equity buyout in Europe to date. As part of the transaction, Pinault Printemps Redoute (PPR), the previous owner of Rexel, sold its stake to Ray Investment, a consortium that included Clayton, Dubilier & Rice (CD&R), Eurazeo, and Merrill Lynch Global Private Equity.
CD&R brought something unique to the deal: an "operating partner" model that had pioneered a hands-on approach to value creation. CD&R credits this practice with giving it an edge in complex deals; for example, in the acquisition of Rexel (a global electrical distributor), the deal thesis was informed by an "operating viewpoint" during due diligence, uncovering value that others missed.
Rexel was de-listed from the Paris Stock Exchange on April 25, 2005. The Rexel Group continued refocusing on its core business. It disposed of certain assets while embarking on a series of acquisitions.
The PE playbook that CD&R applied to Rexel was classic but expertly executed. In order to continue refocusing on its core business, Rexel made a series of asset disposals, but also made new acquisitions: 29 small and midsize companies were acquired during this period.
But the real game-changer came in 2006. In addition to the 29 small and medium-sized acquisitions it made over the period, in 2006 the group bought the American distribution subsidiary of General Electric, GE Supply, which it renamed Gexpro. That moved Rexel into the number one position in North America and Asia-Pacific.
The GE Supply acquisition was transformative. GE Supply, Shelton, Conn., one of the largest electrical distributors in the United States until its acquisition last year by Rexel, Dallas, will now be known as Gexpro. The company will operate as an independent subsidiary of Rexel.
Gexpro (GE Supply) is a full-line, international distributor of electrical parts, power generation products, voice and data equipment, fasteners and security equipment, with $2.5 billion (U.S) in 2006 annual revenues. This single deal nearly doubled Rexel's U.S. presence and brought crucial relationships with major industrial accounts.
They also pursued an aggressive M&A strategy – under CD&R's guidance Rexel made bolt-on acquisitions to enter new markets (including the U.S.). The impact was significant: within the first year, the company pursued big and small improvement initiatives covering a wide range of operations, and over the hold period Rexel's EBITDA grew substantially. CD&R exited Rexel via a successful re-IPO in 2007.
The speed of the turnaround was remarkable. Just two years after going private, Rexel was ready to return to public markets. In 2007, Rexel changed its legal status to become a French public limited company (société anonyme) with a management board and supervisory board. The company was listed on the Paris stock exchange on April 4, 2007 on the Euronext market.
The IPO raised €1.02 billion and marked France's largest spin-off IPO at the time. The private equity sponsors retained significant stakes but had demonstrated the viability of the transformed business.
The PE period established several patterns that continue to define Rexel's strategy. First, the willingness to make transformative acquisitions—GE Supply proved that Rexel could absorb and integrate large, complex businesses. Second, the discipline around portfolio focus—selling non-core assets while doubling down on electrical distribution. Third, the importance of the U.S. market—North America would become an increasingly important growth driver.
For investors, this period offers a useful template for understanding Rexel's DNA. The company learned to operate with leverage, execute rapid integrations, and maintain strategic focus under demanding financial sponsors. These capabilities remain relevant as Rexel continues to pursue bolt-on acquisitions and manage its portfolio.
V. INFLECTION POINT #2: Hagemeyer & European Dominance (2007-2008)
Having just completed an IPO, Rexel immediately embarked on its next transformative deal. This time, the target was Hagemeyer, then the world's number three electrical distributor, and the prize was pan-European dominance.
The deal structure reflected sophisticated thinking about market positioning. In 2007, Rexel teamed up with the Sonepar Group to make a joint offer to purchase the Hagemeyer Group which was then number 3 worldwide. Rather than compete with its closest rival for the same target, Rexel and Sonepar agreed to divide the spoils, each taking the geographies where they could add the most value.
In March 2008, Rexel acquired the majority of Hagemeyer's European assets (Elektroskandia in Scandinavia, ABM in Spain and Newey & Eyre in the United Kingdom). Following that acquisition, Rexel doubled its total sales in Europe, increased the number of points of sale by 50%, and entered the markets of five new countries (Finland, Norway and the Baltic States).
The geographic expansion was dramatic. Rexel was the largest or second-largest market player in Germany, Spain, United Kingdom, Norway, Sweden and Finland. This scale advantage would prove crucial for supplier negotiations and logistics efficiency.
In 2008, Rexel held around 9% of the world market for the distribution of professional electrical equipment. With 2,500 points of sale in 34 countries, the group was a leading player in this sector.
The timing, however, couldn't have been worse. The global financial crisis hit just as Rexel was integrating its largest acquisition ever. The stress test was severe—revenues declined, construction activity collapsed, and the company's leverage became a serious concern.
Yet Rexel emerged from the crisis having proven something important: its business model was resilient. The company had strong relationships with suppliers, sticky customer relationships, and enough geographic diversity to weather regional downturns. The Hagemeyer integration proceeded despite the challenging environment, and by the time recovery began, Rexel had a fundamentally stronger European platform.
This period established European market leadership that persists today. The Hagemeyer assets—particularly the Scandinavian and UK businesses—gave Rexel leading positions in attractive markets with strong electrification prospects.
VI. Strategic Evolution: Emerging Markets & Energy Focus (2009-2018)
The post-crisis years saw Rexel explore two parallel strategic thrusts: geographic expansion into emerging markets and thematic positioning around energy efficiency. Both would ultimately be refined, with emerging markets later rationalized and energy efficiency evolving into the broader electrification theme.
In 2011, the company began seeking acquisitions in emerging markets. As a result, Rexel strengthened its position in China with the acquisition of Lucky Well Zhineng and notably penetrated markets in Brazil (Nortel Suprimentos Industriais), India (Yantra Automation) and Peru.
In early 2012, the group acquired the companies Delamano and Etil, becoming a leader in the Brazilian market. It also continued expanding in the United States by acquiring the independent electrical equipment distributor Platt Electric Supply and Munro Distributing Company for 115 million Euros.
The year 2012 marked a leadership transition as well. The year 2012 also marked the start of Rudy Provoost's tenure as chairman of the management board. He succeeded Jean-Charles Pauze. Under Provoost, Rexel launched the "Energy in Motion" initiative, explicitly positioning the company around energy efficiency.
In June 2013, the group created the Rexel Foundation to harness its know-how and expertise to fight energy poverty. While ostensibly philanthropic, the Foundation served to highlight Rexel's expertise in energy-efficient solutions and reinforce the corporate narrative.
The acquisition machine continued humming. Between 2006 and 2014, the Rexel Group made a total of 58 consolidating acquisitions, together contributing approximately €2.1 billion in sales. This steady cadence of bolt-on deals added capabilities, expanded geographic coverage, and reinforced market positions.
In 2014, Rexel simplified its governance structure. 2014: Change of governance with the introduction of a Board of Directors and a new regional reorganization (North America, Europe and Asia Pacific). The shift from a two-tier board to a unified structure streamlined decision-making.
The focus on energy efficiency was prescient but premature. The massive acceleration in electrification driven by EV adoption, solar deployment, and building automation wouldn't materialize until the late 2010s and 2020s. Rexel was positioning for a secular trend that would take longer to develop than initially expected.
VII. INFLECTION POINT #3: Portfolio Rationalization (2015-2020)
After years of geographic expansion, Rexel made a strategic pivot that would define its modern identity: aggressive portfolio rationalization to concentrate resources on core markets where it could achieve and maintain leading positions.
The thesis was simple but profound: it was better to be number one or number two in fewer markets than number five in many. Scale advantages in distribution are significant—larger players get better pricing from suppliers, can invest more in logistics infrastructure, and can afford better digital tools.
On April 30, 2015, Rexel announced the sale of its businesses in Latin America. The Brazilian dream, which had driven acquisitions just three years earlier, was abandoned. Market conditions were challenging, scale was insufficient, and the capital could be better deployed elsewhere.
In January 2016, Rexel announced it was selling its interests in Poland, Slovakia and the Baltic countries to WĂĽrth. Eastern European markets that had seemed promising proved difficult to scale profitably.
In December 2017, the group announced it would sell its activities in South-East Asia to American Industrial Acquisition Corporation Group. The Asian retrenchment continued, with Rexel focusing on its Chinese joint venture while exiting subscale Southeast Asian operations.
This portfolio discipline has continued into the present. To optimize its portfolio, Rexel divested its New Zealand operations in 2024 and its Finnish operations in April 2025. Even as the company pursues acquisitions in attractive markets, it continuously evaluates peripheral operations for potential divestiture.
The logic is clear: The decision was based on the operation's subscale status and lower profitability compared to group standards. Every dollar of capital tied up in underperforming markets is a dollar that can't be invested in North American growth or digital transformation.
In 2020, the rationalization reached the historic Gexpro business. In 2020, the group parted ways with its Gexpro Services business to devote its resources to the crux of its strategy: the distribution of electrical equipment in the United States and the digital transformation of that equipment.
Gexpro Services, which was acquired by Rexel as part of the GE Supply acquisition completed in August 2006, specializes in providing integrated customized supply chain solutions centered around C-Part products (fasteners, fabrication, mechanical and electrical). While the Gexpro electrical distribution banner remained with Rexel, the specialized supply chain services unit was sold to focus resources on core distribution.
For investors, this portfolio discipline is crucial. Management has demonstrated willingness to exit markets when the economics don't work, even when those markets were recent acquisitions. This pragmatism reduces the risk of capital being trapped in underperforming operations.
VIII. INFLECTION POINT #4: Digital Transformation & Power Up 2025 (2018-Present)
The late 2010s marked another strategic inflection point for Rexel: a decisive bet on digital transformation that would fundamentally change how the company served customers and created value.
2018: Acceleration of organic growth through digital transformation, moving toward a data-driven, omnichannel company offering high value-added services. This wasn't just a technology initiative—it was a strategic repositioning that touched every aspect of the business.
The digital bet was ambitious. "The share of digital in total sales is expected to double and reach 50% by 2027 versus 24% in 2021," says Rexel CEO Guillaume Texier. By 2025, the target was 40% of sales through digital channels.
Progress has been substantial. Digital sales now above €6bn in 2024, making Rexel one of the largest digital BtB players. In Q4 2024, digital now representing 32% of sales in Q4 2024, up +232bps compared to Q4 2023.
The digital penetration varies significantly by region. Europe was at 43% of digital sales, up +357bps, North America was at 22%, a slight increase of +29bps and Asia-Pacific was at 22%. The higher European adoption reflects both customer preferences and Rexel's more advanced digital infrastructure in its home markets.
New leadership arrived in 2021 to accelerate the transformation. Guillaume Texier is Chief Executive Officer of the Group since September 1, 2021. He was previously Saint-Gobain's Senior Vice-President, CEO Southern Europe, Middle East and Africa Region since January 1, 2019.
Texier brought relevant experience. He is a graduate of Ecole Polytechnique and Ecole des Mines in Paris and spent most of his career at Saint-Gobain, which he joined in 2005 and where he held various senior leadership positions, most notably with an international remit. He was also Group CFO between 2016 and 2018, before taking up the position of Deputy CEO in 2019 with responsibility for France, Southern Europe, the Middle East and Africa.
Texier will bring to Rexel his vast international management experience and deep understanding of B-to-B distribution acquired over more than 15 years in senior positions at Saint-Gobain, including running two major North American business units.
Under Texier, Rexel introduced the "Power Up 2025" strategy, with a corporate purpose of "electrifying solutions that make a sustainable future possible." This wasn't just marketing—it represented a deliberate positioning of Rexel as an enabler of the energy transition.
The strategy has since evolved into "Axelerate 2028." To further drive this transformation, we've introduced a new three-year strategy, Axelerate 28, focusing on four priorities: empowered teams, innovative services, operational excellence and an expanded value proposition.
Recent acquisitions reflect this strategic direction. In 2024, Rexel has reached an agreement to acquire Talley, a leading distributor of wireless infrastructure products and solutions in the United States, strongly reinforcing its exposure to the fast-growing data usage trends. Established in 1983 by the Talley family and headquartered in Los Angeles, Talley will generate turnover of c. $360m in 2024 and operates with the support of 11 warehouses and 300+ employees.
Talley delivered outstanding performance, well above expectation, during the first year of integration. Double-digit sales growth and high-single digit current adjusted Ebita margin, well above initial ambitions.
The Wasco acquisition in 2023 demonstrated similar strategic thinking. Rexel announces the acquisition of Wasco, one of the leading distributors of HVAC products and services in the Netherlands, further building its European presence to seize fast-growing electrification opportunities. Founded in 1970 and owned by Gilde Equity Management, Wasco operates 35 branches and 2 distribution centers in the Netherlands, and generated turnover of circa €540m over the last twelve months through end-April 2023, including 60% through digital channels.
The transaction is valued at €485 ($518) million — 9.2 times Wasco's EBITDA. This was Rexel's largest acquisition to date, reflecting confidence in both the Dutch market and the HVAC sector's electrification tailwinds.
For investors, the digital transformation represents both opportunity and execution risk. The benefits are clear: higher customer engagement, better data for inventory optimization, and productivity gains that flow through to margins. The risk is that digital transformation requires sustained investment and cultural change, and the competition—including Amazon Business—is intensifying.
IX. Financial Deep Dive & Current Position
Rexel enters late 2025 as a profitable, cash-generative business with a clear strategic direction but facing meaningful near-term headwinds. Understanding the financial picture requires examining several dimensions.
Scale and Revenue
Revenue: EUR 19.3 billion for full year 2024, up 0.7% on a reported basis. However, Like-for-Like Growth: Minus 2.4% for 2024. This distinction matters—the reported growth was driven by acquisitions, while the underlying organic business faced challenges.
FY 24 sales at €19,285.1m, up +0.7% on a reported basis Same-day sales down (2.4)% in FY 2024. The same-day metric adjusts for the number of working days in each period, providing a cleaner picture of underlying demand.
Geographic Mix
North America has become increasingly important. In North America — 45% of group sales — 4Q sales were up 3.6% year-over-year on a same-day basis (11.3% reported). The acquisition strategy has deliberately shifted the company's center of gravity westward.
Total North American sales were up +0.5% to approximately $8,865.81 million, approximately $7,308 million in the United States and approximately $1,557.8 million in Canada.
Europe, by contrast, faces challenges. The European market faced significant challenges, with a soft economy and political uncertainties impacting sales.
Profitability
EBITA Margin: 5.9% for 2024. Free Cash Flow Conversion: 76% for 2024. The margin represents a significant step down from the prior year, reflecting both revenue pressure and the competitive environment.
Cost management has been disciplined. Opex declined by 1.1% (excluding depreciation) despite an opex inflation of 2.4%. This was notably achieved through productivity initiatives, with headcount reduction accelerating in the course of 2024 to reach (2.7)% at end-December 24 (vs end-December 23), exceeding the volume decline of (1.5)%.
Capital Returns
Rexel maintains a generous dividend policy. The company proposed a dividend of €1.20 per share for 2024, representing a payout of approximately 43% of recurring net income. Share buybacks have totaled €300 million since mid-2022.
The Electrification Exposure
One of the most important investment considerations is Rexel's exposure to electrification trends. Its four electrification product categories (solar, electric vehicle charging infrastructure, HVAC and industrial automation), which represent a combined 21% of total sales, decreased -8.2%.
This decline reflects temporary factors—particularly normalization after a post-pandemic boom in solar—but highlights the volatility in this segment. The long-term thesis remains intact, but the path won't be linear.
Regulatory Overhang
A material issue requiring disclosure: On October 29, 2024, the French Competition Authority ("FCA") imposed a fine totalling €470 million on manufacturers and distributors of low-voltage electrical equipment for vertical resale price fixing.
Schneider Electric was fined 207 million euros, Rexel 124 million euros, Sonepar 96 million euros, and Legrand 43 million euros.
Rexel was ordered to pay a fine of 124 million euros. Rexel considers that this dérogations mechanism, which is transparent and known to all market players, is a standard commercial discount on the purchase price granted by the supplier to the distributor, leaving it completely free to set its resale prices. Rexel will carefully study the Competition Authority's decision and reserves the right to appeal its decision before the Paris Court of Appeal.
This fine will be paid in 2025 and represents a material one-time expense. The appeal remains pending.
2025 Outlook
Management has provided clear guidance. 2025 outlook: Stable to slightly positive same-day sales growth, current adjusted EBITA margin at c. 6% and free cash flow conversion at c. 65%.
Q1 2025 showed encouraging signs. The first quarter of 2025 had positive momentum, with solid growth in North America, Europe recovering sequentially and price effect improving, allowing us to post positive organic sales growth for the first time in one year. Q1 25 sales of €4,825m, up +1.4% on a same-day basis, back to positive territory.
X. Industry Dynamics & Competitive Landscape
Electrical distribution operates in a concentrated but fragmented industry characterized by intense consolidation. Understanding the competitive dynamics is essential for evaluating Rexel's positioning.
The Global Leaders
Drawing on the skill and passion of its 46,000 associates, Sonepar had sales of €32.5 billion in 2024. Sonepar is an independent, French, family-owned group that is the global market leader in B2B distribution of electrical products, solutions, and related services.
Sonepar's private, family-owned structure gives it advantages in long-term planning but limits transparency. Its digital transformation has been aggressive. Sonepar reported a record €11 billion ($11.9 billion USD) in digital sales for 2024, a 30% year-over-year increase. Digital sales now represent more than one-third of Sonepar's total annual revenue of €32.5 billion.
In 2024, Sonepar acquired 17 new companies representing combined sales of $2.4 billion, of which 90% are in North America. The Group is today, in its core business, the leader on the American continent with sales of $17.1 billion spanning eight countries.
Beyond Sonepar and Rexel, the competitive landscape includes WESCO (the largest in North America), Graybar, and Consolidated Electrical Distributors. Acquisitions are reshaping Electrical Wholesaling's annual ranking of the largest distributors.
Consolidation Dynamics
The US market consolidated much in the past 3½ years with 104 deals representing almost $9 billion at acquisition price.
Consolidation is a key driver in the industry, with over 30 deals identified in the last year and 102 since 2020. This trend is not limited to large corporations; independent distributors have been surprisingly active, accounting for half of acquisition activity.
In the past two and a half years, there have been 80 electrical distributor acquisitions. They're not necessarily just a small $10 million company getting rolled up. There are large ones and a number of mid-sized regionals. And what it comes down to is people aging out. Or, if I haven't, and I don't have a kid in the business who wants it, I'm going to monetize it.
This demographic tailwind for consolidation—aging owners without succession plans—should persist for years.
The QXO Episode
In September 2024, Rexel became a takeover target. Rexel confirms it has received earlier this week an unsolicited, non-binding preliminary proposal from QXO regarding a potential acquisition of Rexel at an indicative price of €28.00 to €28.40 per share. Rexel's Board of Directors has reviewed the proposal in detail and has unanimously decided not to pursue it, considering that it significantly undervalues the company and does not reflect its value creation potential through its Power Up 25 strategic plan.
Rexel SA shares rose the most in four years after the French electrical equipment supplier rejected a more than $9 billion takeover bid from QXO Inc.
QXO, led by Brad Jacobs (founder of XPO Logistics), saw building products distribution as an attractive consolidation opportunity. Considering the M&A discipline of QXO's founder Brad Jacobs, and the importance of QXO's initial acquisition into the broader building products distribution industry, we do not perceive a QXO/Rexel combination. We infer QXO continues to be in active discussions with roughly a dozen other initial M&A targets across the broader building products distribution market.
The rejected bid established a floor on perceived value while highlighting Rexel's strategic importance.
XI. Competitive Analysis: Porter's Five Forces & Strategic Positioning
Understanding Rexel's competitive position requires systematic analysis of industry structure and competitive advantages.
Threat of New Entrants: LOW-MEDIUM
Electrical distribution has meaningful barriers to entry. A new entrant would need to build a branch network, establish supplier relationships, develop logistics infrastructure, and create customer awareness. The capital requirements are substantial, and the returns to scale favor incumbents.
However, one disruptive force looms: Amazon Business. The e-commerce giant has been expanding aggressively into B2B distribution, leveraging its logistics infrastructure and customer relationships. For now, electrical distribution's complexity—including technical specifications, local code compliance, and service requirements—provides some protection. But this threat bears monitoring.
Supplier Power: MEDIUM
Major suppliers include Schneider Electric, ABB, Siemens, and Legrand—large, sophisticated manufacturers with their own market power. However, distributors like Rexel provide essential reach and customer relationships that manufacturers can't easily replicate.
The recent French antitrust case illustrates the complex relationship between manufacturers and distributors. The decision sanctions two price agreements: one between Schneider Electric and its distributors Rexel and Sonepar from December 2012 to September 2018; and the other between Legrand and its distributor Rexel from May 2012 to September 2015.
While the pricing mechanisms were deemed anticompetitive, they also demonstrated the interdependence between manufacturers and distributors in this market.
Buyer Power: MEDIUM
Rexel's customers range from large contractors and industrial companies with significant purchasing power to small electricians with minimal leverage. The mix matters—large customers drive volume but demand lower margins, while small customers provide better margins but higher service costs.
Digital tools and price transparency have increased buyer power over time, but switching costs remain meaningful due to credit relationships, technical support dependencies, and integrated ordering systems.
Threat of Substitutes: LOW
Electrical products are necessary for construction and maintenance—there are no real substitutes for wiring, breakers, and electrical equipment. However, the distribution function faces potential substitution from direct manufacturer sales or alternative distribution channels.
Competitive Rivalry: HIGH
Competition among established distributors is intense, particularly on price. The industry's fragmented structure and ongoing consolidation create both competitive pressure and acquisition opportunities.
Hamilton Helmer's 7 Powers Assessment
Examining Rexel through the lens of Hamilton Helmer's 7 Powers framework reveals a nuanced picture:
Scale Economies: Present but not overwhelming. Larger distributors get better supplier pricing and can invest more in digital infrastructure, but minimum efficient scale is achievable by mid-sized regional players.
Network Effects: Limited. Unlike platform businesses, Rexel doesn't benefit from user-driven network effects.
Counter-Positioning: Potentially relevant versus Amazon Business. Rexel's local presence, technical expertise, and contractor relationships represent a business model that Amazon may struggle to replicate.
Switching Costs: Moderate. Customer relationships, credit lines, and integrated ordering systems create some stickiness, but products are largely standardized.
Branding: Weak. In B2B distribution, brand matters less than price, availability, and service.
Cornered Resource: Limited. Supplier relationships and customer data provide some advantage but are replicable.
Process Power: Potentially emerging. Rexel's investments in digital transformation and logistics optimization could create operational advantages that are difficult to copy.
XII. Bull Case vs. Bear Case
The Bull Case
Electrification Tailwinds Are Real and Durable
The energy transition isn't a trend—it's a fundamental reshaping of global energy infrastructure. Building electrification, EV charging deployment, solar installation, and grid modernization all require massive quantities of electrical products. As a leading distributor, Rexel sits at the center of these flows.
North American Positioning Is Strengthening
With nine acquisitions since 2021, Rexel has dramatically enhanced its U.S. and Canadian presence. The Talley acquisition in particular opens attractive datacom and wireless infrastructure opportunities. The company's North American operations surged 7.4% on a same-day basis, with high-growth verticals such as datacenters and broadband infrastructure contributing to more than half of the growth in the US.
Digital Transformation Creates Sustainable Advantage
With €6 billion in digital sales and growing, Rexel is building capabilities that smaller competitors can't match. Digital tools drive customer engagement, improve inventory management, and enable productivity gains.
Capital Allocation Discipline
Management has demonstrated willingness to exit subscale markets and focus resources on high-return opportunities. The portfolio rationalization over the past decade has created a more focused, higher-quality business.
Attractive Valuation
At current prices (late November 2025), Rexel trades at a meaningful discount to the rejected QXO bid price of €28-28.40 per share. If the company delivers on its medium-term targets, substantial upside exists.
The Bear Case
European Exposure Creates Drag
With nearly half of revenue from Europe, Rexel is exposed to the region's weak growth and political uncertainty. The soft economic environment has pressured organic growth, and recovery timing remains unclear.
Electrification Headwinds May Persist
The 8% decline in electrification categories in 2024 reflects more than just base effects. Solar oversupply, policy uncertainty, and uneven incentive frameworks could continue to pressure these segments.
Competition Is Intensifying
Sonepar's aggressive digital transformation and acquisition activity creates a formidable competitor. Amazon Business represents an unknown long-term threat. Margin pressure could intensify.
Regulatory Risk
The €124 million antitrust fine demonstrates regulatory exposure. Similar issues could emerge in other jurisdictions, and any appeal outcome is uncertain.
Cyclical Vulnerability
Construction activity drives significant Rexel demand. An economic downturn would pressure volumes, and the company's operating leverage would amplify the earnings impact.
Integration Execution Risk
With multiple recent acquisitions requiring integration—Talley, Wasco, and smaller deals—execution risk exists. Each integration consumes management attention and carries the potential for disappointment.
XIII. Key Metrics to Track
For investors following Rexel, three key performance indicators deserve particular attention:
1. Same-Day Sales Growth (Organic Growth)
This metric strips out the impact of acquisitions, working day differences, and currency movements to show underlying demand trends. It's the clearest indicator of whether Rexel is gaining or losing ground in its markets. Management targets stable to slightly positive same-day growth in 2025; exceeding this would signal improving conditions.
2. Digital Sales Penetration
Currently at 32% of sales, with a target of 50% by 2027, digital penetration tracks the digital transformation that underpins Rexel's productivity and customer engagement strategies. Continued progress indicates strategic execution; stagnation would be concerning.
3. Adjusted EBITA Margin
With FY 2024 at 5.9% and management targeting ~6% for 2025 and >7% in the medium term, this metric captures both revenue quality and cost discipline. Progress toward the 7%+ target would validate the transformation thesis.
XIV. Conclusion: The Invisible Infrastructure Bet
Rexel's story is ultimately about the unsexy but essential infrastructure that enables the modern energy world. While headlines focus on Tesla's vehicles, solar panel manufacturers, and wind turbine makers, someone has to supply the wires, conduits, breakers, and components that make electrification physically possible.
That positioning creates both opportunity and risk. The opportunity: as the world electrifies, demand for electrical products should grow faster than GDP for decades. The risk: distribution is a competitive, low-margin business where scale matters and disruption (particularly digital disruption) is an ever-present threat.
Rexel's history offers several lessons. The company has survived multiple ownership transitions—from French conglomerate to private equity to public markets—emerging stronger each time. It has demonstrated acquisition integration capabilities, portfolio rationalization discipline, and the ability to execute strategic transformations. The current digital push represents the latest evolution.
The rejected QXO bid highlighted both Rexel's strategic value and management's confidence in the standalone path. Whether that confidence proves justified will depend on execution against the Axelerate 2028 strategy, the trajectory of European recovery, and the continued development of electrification markets.
For long-term investors seeking exposure to the energy transition's infrastructure layer, Rexel presents a compelling option—a profitable, cash-generative business with improving geographic positioning and a clear digital strategy. The key risk is cyclical exposure and competitive intensity in a business where scale advantages exist but aren't insurmountable.
The story of electrical distribution is, in many ways, the story of modern infrastructure itself: unglamorous but essential, fragmented but consolidating, increasingly digital but still dependent on local presence and technical expertise. Rexel sits at the center of this world, positioned to benefit from electrification while facing the same competitive pressures as its peers.
Whether the company ultimately achieves its medium-term ambitions—7%+ EBITA margins, 50% digital penetration, continued market share gains—will determine whether the current share price represents opportunity or fair value. The pieces are in place; execution will tell the tale.
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