Luxemburg, 11/07/2007 (Agence Europe) - In a judgment delivered on Wednesday, the Court of First Instance declared the Commission's prohibition of the acquisition of Legrand by Schneider Electric of France (case T-351/03) illegal. For the first time, the Commission will have to compensate a company for the consequences of a wrong decision with regard to a concentration.
The merger, carried out in August 2001, was declared incompatible with the common market, because of “buttressing”, in the French sectoral markets, of Schneider's dominant position in the electrical panel-board components sector and Legrand's leading position in the downstream electrical equipment segments. Schneider therefore divested itself of Legrand, which was taken over by Wendel/KKR in December 2002, and suffered severe losses (€3.6 billion recovered from an investment of €5.4 billion). The Court found for Schneider, which could not have foreseen that the Commission would invoke, for the first time, the grounds of “buttressing”. The Commission, therefore, will have to pay damages to Schneider amounting to two thirds of its losses, which have yet to be assessed by an expert. The parties now have two months to lodge an appeal with the Court of Justice. This case opens the way for several compensation proceedings. The travel agent MyTravel is currently challenging the Commission over its rejection of the acquisition of First Choice. (cd)