Brussels, 13/12/2012 (Agence Europe) - On Wednesday 12 December, the European General Court rejected an appeal by Belgian energy giant Electrabel in Case T-332/09 requesting annulment of a European Commission decision in June 2009 to fine the company €20 million for acquiring control over Compagnie Nationale du Rhône without prior approval under the EU Merger Regulation (Case T-332/09). The General Court rejected the appeal and confirmed the Commission's decision and fine.
Electrabel acquired de facto sole control over CNR in December 2003 when it acquired 49.95% of CNR's capital, giving it 47.92% of voting rights, but it was not until 9 August 2007 that Electrabel asked the European Commission for its views on its de facto acquisition of CNR (notified formally on 26 March 2008). The Commission gave the merger the green light but fined the Electrabel for doing the deal before notifying it to the Commission and before getting the Commission's go-ahead for the period from 23 December 2003 to 9 August 2007. Electrabel appealed, arguing that the Commission had wrongly formulated its grievances and had not given sufficient reason for the fine, asking for the decision to be overturned and the fine reduced.
In the ruling, the General Court rejected these arguments, saying that the Commission was correct in its view that Electrabel had taken de facto exclusive control over CNR on 23 December 2003 and that even a minority shareholder can be deemed to have exclusive control given its virtual certainty of winning a majority vote among shareholders due to the highly dispersed nature of the other shareholders. Electrabel failed to demonstrate that it did not indeed have virtual certainty of getting its way at CNR AGMs and therefore control over the company. The General Court said that the Commission was right to consider the breach of the rules as serious and long-lasting, even though unintentional (the fact that the company had not notified the merger on time) and therefore the scale of the fine is appropriate. (FG/transl.fl)