(Adobe Acrobat Reader required, available for free download here)
State Aid: Commission Investigates Italian Restructuring Aid
The European Commission has opened a formal investigation under EU State aid rules into financial aid totalling EUR 40.7 million that Italy intends to grant to Legler S.p.A., a denim textile producer. For several years Legler has had financial problems and is currently undergoing restructuring. To help with the restructuring, Italy proposes to grant loans of EUR 26.2 million, and to convert debts of EUR 14.5 million into capital. At this stage, the Commission questions the compliance of the aid with the EU guidelines on restructuring and whether the debt conversion would conform to the “private investor” principle.
State Aid: EU Investigates Aid to Mittal Steel Roman
The European Commission has opened an investigation into debt waivers granted by Romania to Petrotub in 2003, when the company was privatised and sold to Mittal Steel. Petrotub subsequently became Mittal Steel Roman, a producer of pipes and tubes located in Roman, Romania. In the context of the privatisation, various public authorities agreed to waive outstanding debts of around EUR 25 million and to reschedule debts of EUR 0.52 million. The Commission believes these measures could constitute State aid. It also doubts whether they were economically more advantageous to the State than the liquidation of the company. The Commission claims that it has the right to assess this case on the basis of the Romanian Accession Treaty, even though these debt waivers were granted before Romania's accession.
Mergers: Commission Clears Nutreco’s Acquisition of Animal Feed Business From BASF
The acquisition by Dutch-based Nutreco of part of BASF’s animal premix production business has been cleared by the European Commission. Premixes are blends of vitamins and feed additives used for animal nutrition. Although the proposed acquisition would consolidate Nutreco’s position as one of the major producers of premixes in Europe, the investigation demonstrated that the market would remain competitive with a sufficient number of alternative suppliers. As BASF retains its upstream production of vitamins and feed additives, the Commission concluded that competitors’ access to these raw materials would not be affected by the proposed acquisition.
Competition: Commission Publishes Report on Business Insurance
Following extensive consultation with stakeholders, the European Commission has published its final report on competitive conditions prevailing in the business insurance sector. The Commission identified two main areas of concern. First, some long standing and widespread industry practices, involving alignment of premiums were found to lead to higher prices for large risk commercial insurance. For these practices, the Commission invited the industry to either justify them from a competition law point of view, or reform them. Second, the Commission raised concerns over the transparency of remuneration and conflicts of interest in insurance brokerage as these may also lead to less competition and higher prices. The Commission announced that it will reach a decision by 2009 on whether the block exemption Regulation for insurance, which lapses in 2010, is still needed.
Mergers: Kemira GrowHow Acquisition by Yara Approved Subject to Commitments
The European Commission has cleared the acquisition of Kemira GrowHow by Yara International ASA, subject to commitments. Both companies are active in the production and sale of mineral fertilisers and associated chemical products. Commitments were required to alleviate serious competition concerns relating to: (i) the fertiliser distribution markets in Denmark and Latvia (pulling out of distribution joint ventures); (ii) the markets for liquid carbon dioxide in the United Kingdom (sale of liquefaction unit); (iii) the markets for weak nitric acid, ammionium nitrate solution and aqueous ammonia in North Western Europe and in the Nordic countries; and (iv) the market for concentrated nitric acid in Western Europe (sale of certain production facilities in Belgium and Sweden, as well as access to the necessary process chemicals to maintain and expand the output of the divested facilities).
Mergers: Commission Concludes That Spain’s Interference in Endesa Takeover Violates EC Law
The European Commission has informed the Spanish Government of its preliminary conclusion that Spain has violated provisions of the EU Treaty and EU Merger Regulation. Earlier this year, the Commission approved unconditionally the acquisition of joint control of Endesa by Enel and Acciona. However, before the Commission’s decision on the merger, a number of conditions were imposed by the Spanish National Energy Commission (CNE) without prior communication to, or approval by, the Commission. The Commission’s preliminary conclusion is that (i) certain conditions imposed by CNE violate EU rules on free movement of capital, freedom of establishment and free movement of goods, and (ii) CNE interfered with the Commission’s exclusive competence to assess mergers having an EU dimension.
The European Union has submitted to the World Intellectual Property Organisation (WIPO) in Geneva its instrument of accession to the Geneva Act of the Hague Agreement concerning the international registration of industrial designs. The Geneva Act, which so far has 23 signatories, allows designers to obtain protection through a single international application filed with the International Bureau of WIPO, removing the need to register with every national or regional office. The European Union’s accession will allow EU companies, with one single application, to obtain protection of a design not only throughout the European Union, but also in the countries which are party to the Geneva Act. This will simplify procedures and reduce the costs of international protection. The system will become operational on 1 January 2008.
Mergers: Commission Clears Acquisition of One by France Télécom and Mid Europa Partners
The European Commission has approved the proposed acquisition of the Austrian mobile telecommunications operator One by France Télécom and the UK-based private equity investor Mid Europa Partners. The Commission concluded that the transaction would not significantly impede effective competition within the European Economic Area. The Commission further concluded that the proposed transaction demonstrated no potential horizontal overlaps between the activities of the parties in their respective countries of operation. Furthermore, it was found that the proposed transaction would not raise any substantial vertical competition concerns in the wholesale international roaming market, nor in the countries where the parties operate.
NEXT WEEK’S EVENTS
Monday 1 October –
Transports, Telecommunications and Energy Council (
COURT OF JUSTICE
Approximation of laws
C-457/05 Schutzverband der Spirituosen-Industrie
C-217/06 Commission v
Environment and consumers
C-429/05 Rampion and Godard
C-179/06 Commission v
C-523/06 Commission v
Free movement of goods
C-186/05 Commission v
C-311/05 P Naipes Heraclio Fournier v Office for Harmonisation in the Internal Market
C-144/06 P Henkel v Office for Harmonisation in the Internal Market
COURT OF FIRST INSTANCE
T-481/04 Advance Magazine Publishers v OHMI - Capela & Irmãos (VOGUE)