The European Court of First Instance has dealt the Competition Commission a major blow overturning the EU regulator's decision to block the Schneider-Legrand merger just months after slating the regulator's decision in the Airtours case.
Even worse, was the court's unequivocal criticsm of the Commission. The judgment said, “The Commission's economic analysis is vitiated by errors and omissions which deprive it of probative value, save in relation to French sectoral markets
The court also found that there was a “serious infringement of the rights of the defence” in the original decision-making process. The problems related to discrepancies between the statement of objections and the Commission's ultimate decision
The decision on Tetra Laval, the other fast-tracked disputed merger decision will be released next week. The Commission may now have to announce new plans for reforming merger control in response to the Schneider decision and, should it go against the regulator, the Tetra Laval case.
The decision also throws Europe's biggest private equity deal into doubt. This summer a consortium led by Kohlberg Kravis Roberts and Wendel Investissement bought Schneider's interest in Legrand. However, Schneider retained the right to drop the sale on payment of a break fee to the private equity investors should its appeal on Legrand succeed.