EN

This text is made available for information purposes only.
A summary of this decision is published in all Community languages in the Official Journalof the European Union.

Case No COMP/M.4994 ELECTRABEL /COMPAGNIE
NATIONALE DU
RHONE

Only the French text is authentic.

REGULATION (EC) No 4064/89
MERGER PROCEDURE

Article 14(2)Date: 10/06/2009

COMMISSION OF THE EUROPEAN COMMUNITIESBrussels, 10 June 2009

C(2009) 4416

PUBLIC VERSION

Commission Decisionof 10 June 2009
imposing a fine for putting into effect a concentration in breach of Article 7(1) of
Council Regulation (EEC) No 4064/89(Case COMP/M.4994 Electrabel/Compagnie Nationale du Rhône)(Only the French text is authentic)(Text with EEA relevance)

European Commission, B-1049 Brussels, Belgium. Telephone: (32-2) 299 11 11.

THE COMMISSION OF THE EUROPEAN COMMUNITIES,Having regard to the Treaty establishing the European Community,
Having regard to the Agreement on the European Economic Area, and in particular
Article 57 thereof,
Having regard to Council Regulation (EC) No 139/2004 of 20 January 2004 on thecontrol of concentrations between undertakings1, and in particular Article 26(2) thereof,
Having regard to Council Regulation (EEC) No 4064/89 of 21 December 1989 on thecontrol of concentrations between undertakings2, and in particular Article 14(2)(b)thereof,
Having given Electrabel SA the opportunity to put forward its observations on theconcerns raised by the Commission,
Having consulted the Advisory Committee on Concentrations3,
Having regard to the final report by the Hearing Officer in this case4,

WHEREAS:I.

INTRODUCTION

1.

On 26 March 2008 the Commission received notification in accordance with
Article 4 of Regulation (EC) No 139/2004 of a planned merger whereby
Electrabel SA ("Electrabel", Belgium), controlled by the Suez group ("Suez",
France), was to acquire, within the meaning of Article 3(1)(b) of that Regulation,
control over Compagnie National du Rhône SA ("CNR", France) by purchase ofshares.

2.

On 9 August 2007 Electrabel had contacted the Commission in order to obtain its
opinion on the acquisition by Electrabel of de facto sole control over CNR. Therefollowed a series of discussions between Electrabel's legal advisers and theCommission, the purpose being to enable the latter to analyse the present and pastsituation of CNR in this regard.

1

OJ L 24, 29.1.2004, p. 1.

2

OJ L 395, 30.12.1989, p. 1; corrected version: OJ L 257, 21.9.1990, p. 13. Regulation last amended byRegulation (EC) No 1310/97 (OJ L 180, 9.7.1997, p. 1).

3

OJ C 279, p.6

4

OJ C 279, p.7
2

3.

After the discussions, the Commission came to the conclusion that Electrabel had
indeed acquired de facto sole control over CNR. As the thresholds laid down in
Article 1 of Regulation (EC) No 139/2004 were exceeded, Electrabel notified thistransaction on 26 March 2008.

4.

On 29 April 2008, acting under Article 6(1)(b) of Regulation (EC) No 139/2004,
the Commission decided not to oppose the concentration, and declared it
compatible with the common market and the EEA Agreement.

5.

In its decision the Commission concluded that Electrabel did indeed exercise
de facto sole control over CNR but left open the question as to the exact date on
which control was acquired, as this had no implications for the competition
analysis of the transaction.

6.

The information in the Commission’s possession shows that Electrabel had in
reality acquired exclusive control of CNR on 23 December 2003, before the entry
into force of Regulation (EC) No 139/2004.

7.

Article 26(2) of Regulation (EC) No 139/2004 states that any concentration inwhich control was acquired prior to the date of application of that Regulation
continues to be governed by Regulation (EEC) No 4064/89.

8.

On 17 December 2008, the Commission sent Electrabel a statement of objections
on the basis of Article 18 of Regulation (EEC) No 4064/89. In the statement ofobjections the Commission explained why it believed that Electrabel had in fact
already gained sole control of CNR as of 23 December 2003, i.e. prior to theentry into force of Regulation (EC) No 139/2004.

9.

On 16 February 2009, Electrabel replied to the statement of objections, requestinga hearing, which was held on 11 March 2009. On 23 March 2009, theCommission sent a letter setting out the facts of the case to Electrabel, in order toelicit its views on a number of issues raised in connection with CNR in the Suez
group annual report for 2003 and the Electrabel annual report for 2004. Electrabel
replied to this letter on 30 March 2009.

II.

THE PARTIES

10.

Electrabel is a subsidiary of Suez. The Suez group is an industrial and service
group active in the management of public utility services as a partner of local
authorities, undertakings and individuals in the electricity, gas energy services,
water and public health sectors. The Commission authorised the merger between
Gaz de France (GDF) and Suez by decision of 14 November 2006, subject tocommitments entered into by the parties. Although it was delayed in relation to
the initial timetable, the merger took effect on 22 July 2008.

11.

Electrabel is engaged more specifically in four basic activities: (i) production ofelectricity; (ii) sale of electricity, natural gas and energy products and services;(iii) trading in electricity and natural gas; and (iv) operational management ofelectricity and natural gas distribution networks on behalf of certain distribution
network operators. It carries out its activities in France notably through its
subsidiary Electrabel France.

12.

CNR has the task of developing and managing the Rhône valley under aconcession granted by the French State with a specific legal framework (Law of
11 December 2001, the "Murcef Law" – see paragraph 17). In this capacity, it is a3

producer and supplier of electricity and a competitor of EDF. CNR also provides
river engineering services in France and in twenty or so other countries.
III.

THE INFRINGEMENTA.

COMMUNITY DIMENSION

13.

If one takes the view, as this Decision does, that Electrabel took control of CNR
on 23 December 2003, the turnover to be taken into account in order to establish
whether the transaction has a Community dimension is that realised over the last
financial year for which the accounts had been audited, that is, 2002. In 2002
Suez had a turnover of € 46 089 million worldwide, including € 36 528 million in
the Community. In the same year 2002 CNR had a turnover of €401 million
worldwide, including €398 million in the Community. Neither undertaking
achieves more than two-thirds of its aggregate Community-wide turnover within
one and the same Member State. Accordingly, the concentration is above thethresholds laid down in Article 1(2) of Regulation (EEC) No 4064/89 and Article
1(2) of Regulation (EC) No 139/2004, and has a Community dimension.

14.

In its reply to the statement of objections, Electrabel submits that in the statementof objections the Commission failed to classify the infringement in legal terms, inthat it did not specify the facts that might allow the conclusion to be drawn that aconcentration with a Community dimension had taken place.

15.

This argument is not well founded. In paragraph 3 and footnote 3 of the statementof objections the Commission states that the thresholds laid down by Regulation(EEC) No 4064/89 and Regulation (EC) No 139/2004 have been reached, andgives the turnover figures for Suez and CNR in 2002.

16.

Moreover, the Electrabel representative was asked about this point at the hearing,and did not then argue that Electrabel had been unable to exercise its right ofdefence on the point. He merely indicated that Electrabel considered thestatement of objections unsatisfactory, and reserved all Electrabel’s rights.

B.

SHAREHOLDING STRUCTURE AND MANAGEMENT OF CNR

1)
17.

5

Changes in the shareholding structure of CNR
Article 21 of Law No 2001-1168 of 11 December 2001 (the "Murcef Law")prohibits a private operator from holding more than 50% of CNR's capital or
voting rights5. Articles 6 and 39 of CNR's articles of association also contain thisprohibition.

The Murcef Law (establishing urgent measures for economic and financial reforms) stipulates in
Article 21 that a majority of CNR's capital and voting rights must be held by local or regional
authorities, by other legal persons governed by public law or by undertakings belonging to the public
sector. The public entities that currently hold a majority of CNR's capital and voting rights are Caisse
des Dépôts et Consignations (CDC) and close on 200 local or regional authorities and other local
public entities (such as chambers of commerce and industry, chambers of agriculture and port
authorities).
4

18.

The Murcef Law remains in force on the date of this Decision, and was therefore
in force on 23 December 2003, when Electrabel did not notify the acquisition ofcontrol over CNR, and on 26 March 2008, when it did notify the acquisition.

19.

The Murcef Law prohibits private operators from acquiring the de jure control
over CNR which would be conferred by an absolute majority of voting rights.

20.

It should, however, be pointed out that holding more than 50% of the capital or
voting rights is in no way indispensable when it comes to exercising control overa company within the meaning of Community merger control legislation (whether
Regulation (EEC) No 4064/89 or Regulation (EC) No 139/2004).

21.

A much smaller share of the capital may confer control6. This principle is recalledby the Commission notice of 2 March 1998 on the concept of undertakings
concerned under Council Regulation (EEC) No 4064/89 on the control ofconcentrations between undertakings7 and the Commission consolidated
jurisdictional notice under Council Regulation (EC) No 139/2004 on the control
of concentrations between undertakings, adopted on 10 July 20078.

22.

Table 1 below summarises the changes in the share (of voting rights and capital)
held by shareholders with more than 2% of the voting rights in the
period 2003-2007.

TABLE 1: CHANGES IN THE PARTICIPATION OF SHAREHOLDERS WITH MORE THAN 2% OF THE CAPITAL OF
CNR AND THEIR SHARE OF VOTING RIGHTS AT GENERAL MEETINGS SINCE 2001

Shareholder

Electrabel

Caisse desDépôts etConsignations

SNCF
CIC Finances(trustee ofShareheld inCNR
in terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capital

2001

2002

2003

2004

2005

2006

2007

--

--

17.86 %

49.95 %

49.94 %

49.98 %

49.98 %----

16.88 %

47.92 %

47.92 %

47.97 %

47.97 %

13.2 %

13.69 %

7.21 %

29.43 %

29.43 %

33.20 %

33.20 %

13.2 %

13.69 %

9.80 %

29.80 %

29.80 %

33.19 %

33.19 %

16.66 %

16.66 %

22.22 %

--

--

--

--

16.66 %

16.66 %

20 %

--

--

--

--

16.38 %

16.38 %

22.22 %

--

--

--

--

6

See for example Commission Decision of 3 August 1993 in case IV/M.343 - Société Générale deBelgique/Générale de Banque.

7

OJ C 66, 2.3.1998, p. 5, paragraph 14.

8

OJ C 95, 16.4.2008, paragraph 59. Corrigendum in OJ 43, 21.2.2009, p. 10.
5Shareholder
EDF)

Dpt des
Hauts-deSeine

Dpt de SeineSaint-Denis

Dpt du
Rhône

Ville de Paris

ConseilRégional
FrancheComté
ConseilRégional
LanguedocRoussillon
ConseilRégional
PACA
ConseilRégional
Rhône-Alpes
Dpt des
Bouches-duRhône

Shareheld inCNR
in termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrightsin terms
of capitalin termsof votingrights

2001

2002

2003

2004

2005

2006

2007

16.38 %

16.38 %

20 %

--

--

--

--

2.82 %

2.82 %

3.76 %

3.76 %

3.76 %----

2.82 %

2.82 %

3.39 %

3.39 %

3.39 %

--

--

--

--

2.09 %

2.09 %

2.09 %

2.09 %

2.09 %----

1.89 %

1.89 %

1.89 %

1.89 %

1.89 %

11.10 %

11.10 %

7.74 %

--

--

--

--

11.10 %

11.10 %

9.09 %

--

--

--

--

10.95 %

10.95 %

--

--

--

--

--

10.95 %

10.95 %

--

--

--

--

--

2.77 %

2.05 %

--

--

--

--

--

2.77 %

2.05 %

--

--

--

--

--

2.77 %

2.77 %

--

--

--

--

--

2.77 %

2.77 %

--

--

--

--

--

2.77 %

2.77 %

--

--

--

--

--

2.77 %

2.77 %

--

--

--

--

--

2.77 %

2.77 %

--

--

--

--

2.77 %

2.77 %

--

--

--

--

4%

4%

5.38 %

5.38 %

5.38 %

5.38 %

5.38 %

4%4%

4.85 %

4.85 %

4.85 %

4.85 %

4.85 %

Source: Notification form, case COMP/M.4994 Electrabel/Compagnie Nationale du Rhône. The data presented in thetable are those applicable on the dates of the general meetings of CNR. They do not, therefore, correspond to thesituation obtaining on 31 December of the years concerned.

6

23.

Electrabel and Caisse des Dépôts et Consignations (“CDC”) have been CNR's
two main shareholders since 2003.

24.

On 24 June 2003, Electrabel acquired 17.86% of CNR's capital, corresponding to
16.88% of its voting rights9.

25.

In addition, CDC, which was already a CNR shareholder, acquired SNCF's
shareholding (22.22% of the capital and 20% of the voting rights) on
29 August 2003, when it became CNR's main shareholder (with 29.43% of thecapital and 29.80% of the voting rights) alongside Electrabel.

26.

On 23 December 2003, following in particular the acquisition of EDF's
shareholding (22.22% of the capital and 20% of the voting rights), Electrabel
became CNR's main shareholder, with 49.95% of the capital and 47.92% of thevoting rights10.

27.

Electrabel and CDC have since increased their shareholdings in CNR's capitalslightly although, in accordance with the Murcef Law, Electrabel does not hold an
absolute majority of the capital or voting rights (Electrabel: 49.98% of the capitaland 47.97% of the voting rights; CDC: 33.20% of the capital and 33.19% of thevoting rights).

2)

The management of CNR

28.

CNR has been a general-interest limited company since 8 July 2003, governed bya management board and a supervisory board11.

29.

The system of management of CNR is determined, on the one hand, by thearticles of association and, on the other, by a shareholders' agreement ("theAgreement") signed by Electrabel and CDC on 24 July 2003. The Agreement was
signed at the time of the – planned – acquisition of SNCF's and EDF's
shareholdings in CNR12.

30.

On 8 July 2003 Electrabel and CDC signed a protocol of agreement ("theProtocol") that foreshadowed the main features of the Agreement.

31.

The Agreement establishes [...]*13 [...]*14.

9

The dates mentioned in this Decision for the acquisition of CNR shares match the dates on which thecorresponding transactions were recorded in the register of movements in CNR securities.

10

On 27 June 2003, EDF and Electrabel signed a promise to sell and to purchase shares, under which
EDF was to transfer to Electrabel its entire shareholding in CNR's capital. In addition to EDF's
shareholding, which it acquired on 24 December 2003, Electrabel acquired the shareholding of theVillefranche and Beaujolais chamber of commerce and industry on 23 December 2003.

11

Decree No 2003-512 of 16 June 2003 set out the new articles of association of CNR, which had
previously been a limited company with a board of directors. The supervisory board and the
management board were set up on 8 July 2003.

12

See the preamble to the Agreement (Annex 4 to the notification form), which states that Electrabel"plans to acquire from EDF an additional 22.2% shareholding in the capital of CNR" and that CDC"has acquired from SNCF, subject to the condition that the present agreement is concluded, an
additional 22.2% shareholding in the capital of CNR".

*

Parts of this text have been edited to ensure that confidential information is not disclosed; those parts
are enclosed in square brackets and marked with an asterisk.
7

32.

The Agreement also provides that CDC and Electrabel will vote in concert in thegeneral meeting of shareholders and on the supervisory board in order to appoint
the shareholders' representatives on the supervisory board and the members of the
management board (see paragraphs 34 and 36 below). [...]*15.

33.

Under Articles 20 and 21-1 to 3 of the articles of association, the supervisoryboard comprises 13 members appointed or elected for five years, namely nine
shareholder representatives elected at the general meeting, two employee
representatives and two representatives of the State. It elects its chairman andvice-chairman by simple majority of its members. In principle, it acts by simple
majority of the members present or represented. In the event of a tied vote, thechairman or, in his absence, the vice-chairman has the casting vote. Some
decisions require a special two-thirds majority, notably those relating to theappointment of members of the management board and the nomination of its
chairman16.

34.

The Agreement stipulates that CDC and Electrabel will vote in concert at general
meetings when appointing the shareholders' representatives on the supervisoryboard. And so CDC and Electrabel "[...]*"17.

35.

Under Articles 15, 16 and 23 of the articles of association, the management board
comprises three members appointed for a period of five years by the supervisoryboard acting by a special two-thirds majority. Its chairman, who is selected fromamong its members, is appointed by decree on a proposal from the supervisoryboard.

36.

The Agreement states that CDC and Electrabel "[...]*"18.

37.

Under Articles 18-1 and 19 of the articles of association, decisions of the
management board are taken by simple majority of the members present, with thechairman having the casting vote in the event of a tie. The management board
may take any measures that are binding on the company, with the exception of13[...]*.

14[...]*.

15[...]*

16

A two-thirds majority is also required for the putting into effect and amendment of the concession
documents, the appropriation of profits, and amendments to the articles of agreement.

17[...]* The new supervisory board appointed by the extraordinary general meeting on 25 June 2003
comprised three representatives of Electrabel, three representatives of CDC and three representativesof the other shareholders (see Annex 15 to the notification form in case COMP/M.4994 –Electrabel/Compagnie Nationale du Rhône and the replies by Electrabel of 25 June 2008 and
1 July 2008 to the questions put by the Commission on 11 June 2008). [...]*.

18[...]*, the supervisory board on 8 July 2003 appointed the three members of the first management
board, including two who came direct from the Suez group (to which Electrabel belongs). The
members of the management board appointed on 8 July 2003 were: Mr Michel Margnes (chairman andpreviously chairman of the board of directors of CNR before Electrabel acquired an interest in thelatter's capital), Mr Alexandre Joly (special adviser to the general director responsible for the strategy,
development and acquisitions of Suez from 2001 to 2003) and Mr Gaétan Paternostre (active withinElectrabel since 1994).
8those stipulated by the supervisory board as requiring its prior approval19. If thesupervisory board refuses to endorse such a proposal, the management board may
call an extraordinary general meeting of shareholders with a view to receiving
authorisation to take the measure in question.
38.

It should though be noted that the measures requiring approval by the supervisoryboard do not allow it to exercise control over CNR, namely the right to manage
its activities and to determine its business policy20. In particular, the budget, thebusiness plan and the appointment of senior management are decided by the
management board and do not require approval by the supervisory board.

39.

Under Article 36 of the articles of association, the general meeting ofshareholders, which, in principle, is convened by the management board but
which, in exceptional circumstances, may be convened by the supervisory board,
acts by a majority of the votes held by shareholders present or represented.

C.

ELECTRABEL ACQUIRED SOLE CONTROL OVER CNR ON 23 DECEMBER 2003

40.

In the light of the de facto and de jure circumstances described below theCommission considers that Electrabel acquired sole control over CNR, within themeaning of Article 3(3) of Regulation (EEC) No 4064/89, on 23 December 2003.
Contrary to what Electrabel claims in its reply to the statement of objections, thestatement of objections includes a lengthy demonstration that a concentration has
indeed arisen, on the basis of a stable change of the control of the CNR.
Reference is made, in particular, to section IV of the statement of objections.
1.

On 23 December 2003, with the acquisition of EDF's shareholding,Electrabel became CNR's main shareholder by far, and was assuredof having a de facto majority at the general meeting of CNR
shareholders

41.

Since acquiring EDF’s holding on 23 December 2003, Electrabel has been CNR's
main shareholder by far: it has 49.95% of CNR's capital, giving it 47.92% of thevoting rights, while ownership of the remaining shares, excluding CDC's
shareholding, has been very dispersed, since just under 200 local or regional
authorities and other public entities hold 16.82% of the capital.

42.

Paragraph 14 of the notice of 2 March 1998, which applied in December 2003,
clearly states that "A minority shareholder may also be deemed to have solecontrol on a de facto basis … The determination of whether or not sole control

19

At its meeting on 19 September 2003, the supervisory board unanimously restricted the powers of the
management board regarding (i) guarantees (ceiling of €10 million per transaction), (ii) disposal of
immovable property and participations (ceiling of €5 million per transaction), (iii) sureties (ceiling of€10 million per transaction), (iv) acquisition of fixed assets (ceiling of €5 million per unit), and (v)company start-ups, acquisition or extension of shareholdings (ceiling of €10 million per transaction). If
these transactions exceed the thresholds indicated, they must be approved by the supervisory board. Its
approval is also required for membership of any economic interest grouping (GIE) or any associationor company that may entail CNR's joint and several and/or unlimited liability.

20

Both within the meaning of paragraphs 21 et seq. of the notice of 2 March 1998 on the concept ofconcentration under Council Regulation (EEC) No 4064/89 on the control of concentrations between
undertakings, which was in force at the time the supervisory board limited certain powers of the
management board, and within the meaning of the notice of 10 July 2007 (paragraphs 65 et seq.).
9exists in a particular case is based on the evidence resulting from the presence ofshareholders in previous years."2143.

The Commission has applied this principle to a large number of merger-related
issues in the a priori analysis of cases of acquisition of minority participationsuch as to confer control22.

44.

Under the circumstances, given what is still a very dispersed shareholding
structure23, Electrabel had enough votes [...]* (see paragraphs 78 et seq. below).

45.

Given the attendance rate at CNR general meetings in the period 2000-2003(i.e. the voting rights held by the shareholders present, represented or voting by
post as a proportion of the voting rights as a whole, see Table 2 below), and thewidely dispersed nature of the remaining shares, Electrabel has been assured
since 23 December 2003 of having a majority at general meetings enabling it tosecure adoption of the resolutions proposed by the management board, the main
governing body of CNR, which Electrabel in any event controls [...]* (see inparticular paragraphs 78 et seq.). Table 2 below also contains a projection of the
proportion of the votes at the shareholders' meeting that a shareholder with astake of 47.92% of the voting rights (i.e. the percentage of voting rights held byElectrabel since 23 December 2003) would have enjoyed on the basis of theattendance rates at shareholders' meetings in the four years preceding theacquisition by Electrabel of the CNR shareholding held by EDF in
December 2003.

21

To the same effect see paragraph 59 of the consolidated jurisdictional notice of 10 July 2007.

22

See, in particular, the Commission's decisions in the following cases: COMP/M.2404 Elkem/Sapa,
paragraph 7; IV/M.1157 Skanska/Skancem, paragraphs 14 et seq.; COMP/M.3091 Konica/Minolta,
paragraph 6; IV/M.913 Siemens/Elektrawatt, paragraph 9; IV/M.942 VEBA/Degussa, paragraph 9;
IV/M.1046 Ameritech/Teledanmark, paragraph 4; IV/M.1058 Unichem/Alliance, paragraph 6.

23

In addition to Electrabel and CDC, there are close on 200 other shareholders, comprising local orregional authorities and chambers of commerce and industry (see footnote 5), which individually holdless than 1.9% of the voting rights within CNR (with the exception of the Département of Bouches duRhône, which possesses 4.85% of the voting rights). In addition, although the other shareholders are
all "public authorities", Electrabel, with just under 50% of the capital and voting rights, still controls
the general meeting of shareholders for the following reasons: (i) among the "public authorities" there
is CDC, which has concluded an agreement with Electrabel, and (ii) behind the "public authorities"
there is a myriad of interests, and no single view expressing the general interest.
10TABLE 2: PARTICIPATION RATES AT GENERAL MEETINGS FROM 2000 TO 2003 AND PERCENTAGE OF VOTING RIGHTSPRESENT OR REPRESENTED HELD BY ELECTRABEL .

Total number of
votes
Total number ofvotes present or
represented at
GM
Participation
rate (in % of thevotes present or
represented)
Percentage
corresponding
to 47.92% of
the voting
rights (in % ofvotes present or
represented)

46.

24

OrdinaryGMof 27/06/00

OGM
of 21/12/00

Combined(ord/
extraord)
GM
28/06/01

OGM
of 27/06/02

OGM
of 28/11/02

EGM
of 28/11/02

OGM
of 25/06/03

EGM
of 25/06/03

3 600 000

3 600 000

3 600 000

3 600 000

3 600 000

3 600 000

3 000 000

3 000 000

2 599 242

1 547 666

1 987 657

2 262 612

2 756 510

2 611 936

2 011 123

2 055 314

72.2%

43 %

55.2 %

62.9 %

76.6 %

72.6%

67%

68.5%

66.4%

100%

86.8%

76.1%

62.6%

66%

71.5%

70%

An analysis of voting at general shareholders' meetings also indicates thatbetween 2004 and 2007 Electrabel by itself enjoyed a majority of the voting
rights present or represented (see Table 3)24.

In a reply to the Commission dated 7 April 2008, Electrabel stresses that "CDC does not exercise defacto joint control over CNR with Electrabel either, since it has transpired over the years that, inpractice, the latter alone has a majority of the votes at CNR's general meetings and does not need the
support of CDC".
11

TABLE 3: SHARE OF ELECTRABEL AND CDC IN THE VOTING RIGHTS OF SHAREHOLDERS PRESENT AND
REPRESENTED AT GENERAL MEETINGS IN THE PERIOD 2003-2007

OGM of
25 June2003

OGM
convened
extraordinarily
on 25 June2003

EGM of
29
June
2004

Combined
GM on 29
June 2004

OGM on22 June2005

OGM on22 June
2006

Combined
GM on 28
June 2007

Total
number of
voting rights
ofshareholders
present or
represented
at the GM

2 011 123

2 055 314

2 561 825

2 630 387

2 500 502

2 748 504

1 553 455

Votingrights heldbyElectrabel

506 320506 320

1 437 632

1 437 632

1 437 633

1 439 233

1 439 265

As % of thevoting rights
ofshareholders
present or
represented

25.18%

24.63%

56.12%

54.65%

57.49%

52.36%

92.65%

Votingrights heldby CDC294 123294 123894 113894 113894 113995 753

0

Votingrights heldbyElectrabel
and CDC

800 443

800 443

2 331 745

2 331 745

2 331 746

2 434 986

1 439 265

As % of thevoting rights
ofshareholders
present or
represented

39.80%

38.94%

91.02%

88.65%

93.25%

88.59%

92.65%

Source: Notification form for case COMP/M.4994 Electrabel/Compagnie Nationale du Rhône.

47.

In its reply to the statement of objections, Electrabel contests the analysis theCommission sets out there.

48.

Firstly, Electrabel contests the Commission's prospective approach to analysing
developments in voting rights and shareholdings, which it considers to be out ofline with established decision-making practice. It therefore underlines the need toadopt an approach in which the analysis carried out must be largely qualitative(and not merely quantitative, which, it claims, is the Commission's approach). In
this context, Electrabel cites paragraph 59 of the notice of 10 July 2007 and the12Commission decision in the MAN/Scania case25, which, it claims, prove that theCommission used to apply Electrabel's preferred approach.
49.

For this reason, Electrabel takes the view that it could not have detected the defacto acquisition of control over CNR until June 2007, when it was in a position
to examine the situation prevailing during the 2004-2006 period. Electrabelargues that the Commission's decision-making practice requires that a majority beobserved at the general meeting over at least three years, but taking 2007 as thestarting point for this retrospective analysis: "in so far as it transpires that
Electrabel France was, in fact, able to count on a majority of the votes for its
proposals at the general meetings held between 2004 and 2007, it appears that its
de facto sole control over CNR has existed since 2007 in accordance with theCommission's decision-making practice, which requires that there be a constantmajority at the general meeting over at least three years"26.

50.

In its reply to the statement of objections, Electrabel contends that attendances at
the general meetings of CNR’s shareholders between 2000 and 2003 areirrelevant, because CNR's main shareholder at that time was EDF, or in otherwords the French State itself, and the question of the acquisition of control arose
only in 2007, the year in which Electrabel could conclude that it had been able toassemble a majority at CNR general meetings over the whole period 2004-200727.

51.

In support of its analysis, Electrabel mentions a series of cases in which theCommission decided to examine voting patterns in companies over the three
years preceding the transaction in order to determine whether a concentration
existed28.

52.

Electrabel's argument is not well founded.

53.

Firstly, at a formal level, it is based not on the notice of 2 March 1998, which was
in force on December 2003, but on the notice of 10 July 2007. But the rule is thesame in both notices.

54.

Secondly, in any event, the approach proposed by Electrabel is manifestly
incorrect, as it amounts to carrying out an a posteriori analysis that is not in linewith the Commission's decision-making practice, which was very clear as to theneed to conduct an a priori analysis at the time of the acquisition of theshareholding that might confer control.

55.

In past decisions, and notably the MAN/Scania decision cited by Electrabel in the
reply to the statement of objections, the Commission has indeed carried out suchan analysis; but it did so in order to ascertain the concentrative character of the25

Decision of 20.12.2006 in case COMP/M. 4336 - MAN/Scania.

26

Notification form in case COMP/M.4994 – Electrabel/Compagnie Nationale du Rhône, paragraph 84.

27

Reply, paragraphs 23 and 152.

28

Commission Decisions of 28 August 2001 in case COMP/M.2532 – Fiat/ Italenergia/Montedison,paragraph 15; of 3 August 1993 in case IV/M.343 – Société Générale de Belgique/Générale deBanque, paragraphs 7-12; of 3 June 1997 in case IV/M.906 – Mannesmann/Vallourec,
paragraphs 13-20; of 5 December 1997 in case IV/M.1046 – Ameritech/Tele Denmark, paragraph 4; of
22 December 1997 in case IV/M.1058 - UniChem/Alliance Santé, paragraph 6; of 4 February 1998 incase IV/M.1056 - Stinnes/BTL, paragraph 7; and of 12 March 2004 in case COMP/M.3330 – RTL/M6,
paragraphs 7-12.
13

transaction, and thus its own powers, and was consequently seeking either (i) to
examine changes in shareholders over the previous three years, so as to identify
the parties exercising control prior to the operation29, or (ii) to refer to theestablished average of votes present and represented at the general meetings inorder to establish the possible impact of the changes in capital in connection withwhich the Commission was notified of the operation in question30. In
MAN/Scania, the Commission took account of the fact that, in a number of
instances in the preceding years, the voting rights held by Volkswagen would nothave been enough to obtain a majority at the annual general meeting ofshareholders of MAN, and of other factors suggesting that a similar situation
could arise again in the future.
56.

Moreover, the Commission practice, reflected in paragraph 14 of the notice of2 March 1998, confirms the fact that the analysis must be carried out a priori, on
the basis of the data relating to the shareholders' attendance rates in the course of
the preceding years. If this were not the case, it would necessarily mean that acompany could exercise de facto control (without notification or approval) overanother company for three years before notifying the Commission of theoperation, on the basis that it would not be absolutely sure that it was exercising
control until the three years were up.

57.

It can thus be seen that during the three years preceding Electrabel's acquisition ofits shareholding in EDF on 23 December 2003 (2000-2002), the rate ofparticipation in CNR's general meetings (the share of voting rights held by theshareholders present, using a postal vote or represented by proxies) fluctuatedbetween 43% and 76.6%31, in a context of widely dispersed shareholdings.

58.

In fact, Electrabel, holding 47.92% of the voting rights since 23 December 2003,
could certainly expect to obtain an absolute majority at CNR's general meetingsfrom that date onward. For Electrabel to have an absolute majority at the generalshareholders' meetings, the rate of attendance (percentage of voting rights held by
the shareholders present, represented or voting by post) had to be below 95.84%.
Given the rates of attendance in the three years preceding, which were well belowthat threshold, it was highly improbable that Electrabel would not have an
absolute majority at the general meetings from 23 December 2003 onward.

59.

If Electrabel had taken full account of the relevant decision-making practicedeveloped by the Commission, as in its submissions it claims to have done32, itshould have brought the matter to the Commission’s attention by December 2003

29

Commission Decision of 3 August 1993 in case IV/M.343- Société Générale de Belgique/Générale deBanque, paragraphs 7 and 8.

30

Commission Decisions of 3 June 1997 in case IV/M.906 - Mannesmann/Vallourec, paragraph 15; of 5
December 1997 in case IV/M.1046 - Ameritech/Tele Danmark, paragraph 4; of 22 December 1997 incase IV/M.1058 - UniChem/Alliance Santé, paragraph 6; of 4 February 1998 in case IV/M.1056 Stinnes/BTL, paragraph 7; and of 12 March 2004 in case COMP/M.3330 - RTL /M6, paragraph 10.

31

The reports on the general meetings, whether ordinary, extraordinary or combined, show the following
participation rates over the 2000-2003 period: 7.2% (ordinary general meeting of 27 June 2000), 43%(ordinary general meeting of 21 December 2000), 55.2% (combined general meeting of 28 June 2001),
62.9% (ordinary general meeting of 27 June 2002), 76.6% (ordinary general meeting of 28 November
2002), and 72.6% (extraordinary general meetings of 28 November 2002). See Table 2 above.

32

As spelt out in the notice of 2 March 1998 (paragraph 14).
14

at the latest, when it acquired further shares from EDF that brought its total shareto 49.95% of CNR's capital and to 47.92% of the voting rights; it might havedone so by consultation, as it did in 2007. As in 2007, the Commission would
then have applied the established decision-making practice to confirm that
Electrabel was acquiring sole control of CNR and was thus obliged to notify thetransaction.
60.

Secondly, in the context of the alternative approach which it prefers, Electrabelargues that the low rate of participation in CNR's general meetings between 2000
and 2002 is irrelevant, as it reflects the trust that small public shareholders had in
EDF, which was CNR's main shareholder at that time.

61.

Electrabel provides no evidence that the small shareholders placed such trust in
EDF. On the contrary, it should be stressed that EDF had not availed itself of its
voting rights within CNR (on the board of directors and at the general meeting)since 1 April 200133. It is therefore rather difficult to argue, as Electrabel does,that the small public shareholders trusted in a shareholder which was no longer
exercising its rights as a shareholder in CNR.

62.

Thirdly, still in the context of its alternative approach, Electrabel takes the viewthat the participation rate in the above-mentioned years is not representative, inthat Electrabel could legitimately expect the rate of participation in general
meetings to rise after 23 December 2003, the date from which it held 47.92% ofvoting rights in CNR, after its acquisition of EDF's shareholding.

63.

According to Electrabel, it was legitimate to expect an increase in the rate ofparticipation in general meetings, given that, since 2003, several public
shareholders had openly declared their opposition to the arrival of a private
shareholder at CNR and had expressed their fears as to whether the latter would
continue to be a public corporation; moreover, such concerns continued to exist
several years after Electrabel's acquisition of a holding in CNR.

64.

Electrabel argues that a significant response on the part of the other public
shareholders seemed likely, given that the public shareholders as a group sharedcommon links and strategic interests as shareholders of CNR.

65.

Electrabel's argument is not well founded.

66.

Firstly, Electrabel provides no concrete information concerning the opposition
and the fears supposedly expressed as of 2003 in response to Electrabel'sacquisition of a holding in CNR.

67.

The sole instance of this kind pointed to by Electrabel is the concern expressed ata meeting of the supervisory board on 7 July 2005, which is a long time after
200334.

68.

Moreover, in the course of that meeting, no-one expressed any concern at or
opposition to the fact that Electrabel was a shareholder in CNR. At the point
during the meeting when the shares of the Département of Hauts-de-Seine were to33

In case COMP/M.1853 EDF/EnBW, EDF undertook not to exercise its rights as of 1 April 2001 and to
entrust them to a proxy.

34

At the hearing, the Commission asked Electrabel to quote the exact statements made by local public
shareholders in CNR expressing opposition to or concerns about Electrabel as of 2003. Electrabel was
unable to do so and merely referred the Commission to the minutes drawn up by CNR's governing
bodies.
15

be transferred, the members representing the employees recalled that under the
Murcef Law these shares could not be transferred to Electrabel and that the party
to which they were to be sold should be clearly indicated35. In reply, a member
representing CDC said that the party acquiring the securities would be CDC36,
and another member representing Electrabel declared that the greater part of CNR
would stay in public ownership under the Murcef Law37. The representative of theProvence Alpes Côte d'Azur Region stated that employees and neighbours should
be reassured that CNR would remain in public ownership and would continue topromote the common good. And far from expressing reservations with regard to
Electrabel, the same representative declared that that "does not mean that private
partners cannot share a concern for the common good"38.
69.

Secondly, Electrabel's argument implies that CNR's public shareholders constitutea community with common interests. However, it does not supply any concrete
evidence in favour of the existence of such a community.

70.

First of all, the efforts of French legislators to maintain the mainly public
structure of CNR's capital do not imply the existence of a community of interests
or of any defence of a "common interest" shared by public shareholders such as
might thwart Electrabel's wish to exercise control over CNR.

71.

In this context, suffice it to point out that the rate of approval of resolutions at thegeneral meetings, as notified by Electrabel, has always been very high.

72.

Moreover, Electrabel fails to consider the fact that, as regards a community ofinterests among the public shareholders, one essential public shareholder, CDC(which held 29.8 % of voting rights on 23 December 2003), allied itself with
Electrabel [...]*.

73.

Moreover, it is noteworthy that, at the general meeting of 25 June 2003,
Electrabel's representatives on the supervisory board were elected with majorities
as large or larger than the representatives of the public bodies, which contradicts
one of the essential points in Electrabel's arguments, that is, the possibility of the

35

The members representing the employees on the supervisory board were Mr […]* and Mr […]*. Mr[…]* "expressed his astonishment at the recent press release announcing the possible transfer of theshares of the Département of Hauts-de-Seine which, in his opinion, called the Murcef Law into
question." Mr […]* "recalled that, in the present stage of negotiations on the end of the general
operating agreement, CNR must be clear in its communications and must therefore indicate that
Caisse des Dépôts et Consignations will acquire the securities, if such is the case, in order to ensurethat the majority share of capital remains in public ownership" (p. 3 of the minutes of the supervisoryboard meeting of 7 July 2005).

36

Mr […]* (CDC) "noted that the party acquiring the securities was Caisse des Dépôts etConsignations, and that its shareholding in the company would increase from 29% to 32.5%" (p. 3 ofthe minutes of the supervisory board meeting of 7 July 2005).

37

Mr […]* (Electrabel) "confirmed what the previous supervisory board had already been told, that
there would continue to be a majority public holding in CNR, in accordance with the law; only
Parliament could change this. In his view, the policies of the Suez group had not changed. Suez was
satisfied with the existing partnership" (p. 3 of minutes of the supervisory board meeting of
7 July 2005).

38

Mr […]* "thought employees and neighbours should be reassured that CNR would remain in public
ownership and retain a concern for the common good, which did not mean that the private partners
could not also be concerned for the common good" (p. 4 of the minutes of the supervisory board of
7 July 2005).
16other shareholders forming a coalition to prevent Electrabel from acquiring
greater power within CNR, supposedly an undesirable outcome39.
74.

Furthermore, it is worth noting that at CNR's general meeting on 25 June 2003
the public shareholders other than CDC, far from presenting a united front,
displayed their differences when electing the members of the supervisory board.
Several local public shareholders criticised the fact that the three posts on theboard set aside for the local public bodies had been divided up in advance
between (i) the Provence Alpes Côte d'Azur Region, (ii) the Rhône-Alpes Region,and (iii) the Département of Bouches du Rhône40. Consequently, otherrepresentatives of local public bodies stood for election to the supervisory board41
against those proposed by the chairman of the general meeting.

75.

Finally, it should also be pointed out that, in contrast to what Electrabel suggests,
the other public shareholders (apart from CDC) have not become systematicallymore assiduous in attending meetings since December 2003.

76.

On the one hand, it must be noted that, for example, the three main public
shareholders, representing a total of 10.13% of voting rights of the CNR (theDépartement of Bouches-du-Rhône accounting for 4.85%, the Département ofHauts-de-Seine for 3.39% and the Département of Seine-Saint-Denis for 1.89%),
abstained or were absent (and in some cases unrepresented) at the generalshareholders' meetings held in 2004 (29 June) and 2005 (22 June)42.

77.

On the other hand, the fluctuations registered in the attendance rate of the generalshareholders' meetings held since 2003 are, essentially, explained by the
behaviour of CDC: on 29 August 2003, CDC acquired the stake held by SNCF
(which was not represented at the shareholders' meeting of 25 June 2003), CDC
later increased its stake, and, finally, CDC was not represented at theshareholders' meeting of 28 June 2007. These fluctuations are therefore not linked
to a change in the behaviour of the local public bodies.

39

See p. 10 of the minutes of the extraordinary general meeting of 25 June 2003. The successful
candidates obtained the following percentages in favour: Mr […]* (Provence Alpes Côte d'Azur
Region), 99.6%; Mr […]* (Electrabel), 96.9%; Mr […]* (CDC), 96.8%; Mr […]* (Electrabel),
96.2%); Mr […]* (CDC), 95.5%; Mr […]* (Electrabel), 95,2%; Mr […]* (Département of Bouches duRhône), 93,7%; Mr […]* (Rhône-Alpes Region), 91.1%; and Ms […]* (CDC), 76.7%. Six othercandidates, all of whom represented local public bodies, were not elected.

40

See pp. 3 to 6 of the minutes of the extraordinary general meeting of 25 June 2003. Mr […]*,
representing one of the local public bodies with shares in CNR, criticised the proposal put forward by
the chairman of the general meeting, who was also CNR's CEO, to share out the three seats on the
supervisory board reserved for local public bodies between the Provence Alpes Côte d'Azur Region,
the Rhône-Alpes Region and the Département of Bouches du Rhône. Mr […]* stated that he "expected… a discussion to be held between the public bodies representing the regions of Isère, Drôme,
Bouches du Rhône and Saône-et-Loire, the main purpose of which would be to ensure that CNR wasproperly represented along the whole course of the river. According to the proposed arrangements,
CNR would be represented solely by public bodies to the south of Montélimar, a geographic
representation which entirely failed to take account of the important interests of public bodies in thenorth". Mr […]*'s remark was approved by [five representatives of local authorities]*.

41

See p. 9 of the minutes of the extraordinary general meeting of 25 June 2003. The persons concerned
were [six candidates]*.

42

Notification form in case COMP/M.4994 - Electrabel/Compagnie Nationale du Rhône, paragraph 81.
17

2)

Since 2003 Electrabel has held an absolute majority on CNR's
management board and has had the means to keep that majority

78.

The rules on the appointment of the members of the management board laid downin the articles of association of CNR and the Agreement between Electrabel and
CDC guarantee the presence of two members of Electrabel out of the threecomprising the management board, which means that Electrabel has sole control
over CNR. [...]*. With six of the 13 seats on the supervisory board, CDC andElectrabel can determine the membership of the management board by using theirblocking minority (given that the appointment of members of the board of
directors calls for a two-thirds majority on the supervisory board, that is, nine
members out of 13).

79.

CNR's other governing body, the supervisory board, on which neither Electrabel
nor CDC constitute a majority, either separately or jointly [...]*, has to give its
approval for certain decisions proposed by the management board.

80.

However, as already pointed out (see paragraph 38), the measures which thesupervisory board is required to approve are not such as to enable the latter toexert a determining influence on CNR's strategy.

81.

Secondly, it is very clear that in the event of a conflict between these two
governing bodies, the conflict is resolved by the general meeting, acting by amajority of votes of the shareholders that are present or represented, so thatdecision-making power ultimately resides in the general meeting43. Given theweight of its share of voting rights and the dispersal of the other shareholders,Electrabel is in a position to ensure that its views prevail at general meetings.

82.

In its reply to the statement of objections, Electrabel reiterates that the general
meeting really is the body in which ultimate decision-making power resides in theevent of a conflict between the governing bodies (the management board and thesupervisory board). It concludes from this that developments connected with thefact that Electrabel holds a majority on the management board have no bearing onan analysis of the case. This argument does not contradict the arguments put
forward by the Commission, which views control over the general meeting as an
essential aspect of the acquisition of control.

83.

However, to continue the analysis of the management board taken in isolation,
suffice it to recall here (i) that the management board is the vital body which
manages CNR's activities and determines its business policy, and that it is under
the control of Electrabel44, and (ii) that since 8 July 2003, and without any
interruption since that time, two of three members of the management board haverepresented Electrabel. Electrabel did not deny this fact either in its reply to thestatement of objections or in the course of the hearing.

43

See the notification form in case COMP/M.4994 - Electrabel/Compagnie Nationale du Rhône,paragraph 76.

44

CNR's articles of association state that "the company shall be headed by a management board withthree members" (Article 15). The management board has "the most extensive powers to take action
under any circumstances on behalf of the company, the only limiting factor being the objects of thecompany defined in Article 3" (Article 18-1).
18

84.

In its reply to the statement of objections, Electrabel adduces the existence of theAgreement as evidence that Electrabel knew it was unable to control CNR on its
own45.

85.

In fact, as demonstrated in the statement of objections, whilst the Agreement does[...]*. The issue raised by Electrabel would be relevant only if the Agreement had
clearly conferred on CDC a veto on the nomination of the members of thegoverning bodies under Electrabel's control, which is not at all the case.

86.

In fact, [...]* the Agreement between Electrabel and CDC also prevents CDC andthe other shareholders from concluding a shareholders' agreement that may givethem de jure control over CNR.
3)

The Murcef Law does not prevent Electrabel from acquiring control
over CNR

87.

In its reply to the statement of objections, Electrabel stresses that the purpose of
the Murcef Law is to prevent any private operator from holding more than 50% of
the capital or voting rights of CNR. Electrabel considers that this is an additional
indication showing that Electrabel had not acquired de facto control over CNR.

88.

Electrabel's argument is not well founded.

89.

The French legislature’s desire to keep the majority of the shares in CNR in
public ownership is a question separate from that of the acquisition of control
under Community merger control law. That there may be such an intention does
not in any way mean that that there cannot be control, and in particular de facto
control, within the meaning of merger control law.

90.

According to Electrabel, the Commission considered in Samsung/AST that
Samsung did not acquire control of AST in December 1995 because there was aclause in a shareholders' agreement prohibiting the acquisition by Samsung of
more than 49.9% of the capital up to 15 December 1998. Given the importancethat the Commission attached in that case to a contractual limitation, Electrabelargues, it must grant even greater importance to a legal limitation like the one
contained in the Murcef Law.

91.

The Samsung/AST case cited by Electrabel in fact contradicts Electrabel'sargument as regards the importance to be attached to the Murcef Law. In
Samsung, the contractual limitation preventing the acquisition of more than
49.9% of the capital of AST up to 15 December 1998 did not prevent theCommission from concluding in its decision that Samsung had acquired control
over AST as of January 199646.

45

As regards relations between CDC and Electrabel, the latter does not contest, either orally or inwriting, the Commission's analysis excluding the possibility of joint control over CNR by the twocompanies. This point was raised at the hearing by the representative of France, and Electrabel has
confirmed that it does not argue that there might have been joint control of CNR by CDC andElectrabel.

46 Commission Decision of 18 February 1998 imposing fines for failing to notify and for putting into effecta concentration in breach of Article 4(1) and Article 7(1) of Council Regulation (EEC) No 4064/89(case IV/M.920 - Samsung/AST), paragraph 8: "On that basis, it can be concluded that as theCommission established in its decision of 26 May 1997 and as the parties have recognised, theacquisition of control of AST by Samsung, within the meaning of Article 3(3) of the Merger
Regulation, took place at least in January 1996."
19

92.

Another Commission precedent also shows that a law prohibiting the acquisitionof a majority of the voting rights in a given company, such as the Murcef Law, is
not incompatible with the acquisition of de facto control. In case M.3330
RTL/M647, a French law prohibited any single natural or legal person, acting
alone or in concert, from holding more than 49% of the capital or the voting
rights of M6, a national television channel. RTL held 48.8% of the capital of M6,
and the French broadcasting regulator, the Conseil Supérieur de l'Audiovisuel,had restricted RTL’s share of the voting rights to 34%. But RTL notified theacquisition of de facto sole control, and the Commission found that RTL did
indeed exercise sole control, in the light in particular of the dispersion of theremaining shareholdings and of the prospective analysis carried out.

93.

Lastly, Electrabel itself considers that it acquired de facto control over CNR in
200748: the Murcef Law was still in force then, as it is now. This clearly showsthat the Murcef Law could not prevent the acquisition of de facto control of CNR
by a private shareholder.

4)

94.

Since 2003, having taken over the industrial role played by EDF
within CNR, Electrabel has been CNR's only industrial shareholder
and it has been playing a central role in the latter's operational
management

This argument is based on two separate facts: (i) EDF's withdrawal from theoperational management of CNR and (ii) Electrabel's takeover of the industrial
role and of operational management.
•

EDF's withdrawal from the operational management of CNR

95.

As CNR's sole industrial shareholder, Electrabel has taken over the industrial role
formerly played by EDF. Since 1948, CNR was bound by contract to EDF as
regards the running of its hydroelectric plants. Moreover, EDF held a sixth of
CNR's capital and had a representative on its board of directors.

96.

In the context of the acquisition in 2001 of joint control over EnBW (together
with OEW)49, EDF undertook to ensure that CNR would be enabled to be an
entirely independent electricity producer, that is, that CNR would be able to run
its power plants and sell the electricity produced independently.

97.

To this end, EDF undertook, inter alia, to refrain henceforth from exercising its
voting rights at general meetings except through an independent proxy, and torefrain from having a representative on the board of directors. At the same time, itcommitted itself to purchasing, between 1 April 2001 and 1 April 2006, at CNR'srequest, a proportion of the electricity produced by CNR, to enable the latter toenter the electricity market gradually.

98.

In its reply to the statement of objections, Electrabel argues that the statement ofobjections pays no attention to the active role played by EDF up to the end of47

Commission Decision of 12 March 2004 in case COMP/M.330 – RTL/M6, paragraphs 7 to 12.

48

See for instance paragraph 140 of Electrabel’s reply to the statement of objections.

49

Commission Decision of 7 February 2001 in case COMP/M.1853 – EDF/EnBW. See in particularparagraphs 91 and 92 and the commitments made by EDF and attached to the Decision.
20

2006: it says that EDF played an essential role in the operational management of
CNR until the end of 2005, and remained a very significant commercial partner of
CNR until the end of 2006.
99.

Electrabel's argument is not well founded.

100.

Firstly, the existence of agreements between EDF and CNR is not incontradiction with the fact that CNR is able to define its industrial andcommercial policy independently of EDF. Proof of this is provided by the factthat EDF undertook, as stated in paragraph 96, that CNR would be given themeans to become an independent producer of electricity as of 1 April 2001.
Moreover, Electrabel itself acknowledges that EDF no longer exercised adetermining influence on CNR after 200150 and that CNR was responsible for themain choices to be made as regards its industrial management and businessdecisions51.

101.

Secondly, as noted below, since its annual report on the 2003 financial year, Suez(of which Electrabel is a subsidiary) has drawn attention to the fact that Electrabel
has taken over operational control of CNR, and has included CNR's power
stations in Electrabel’s electricity generating capacity52.

102.

Finally, as regards the purchasing of electricity from EDF, Electrabel in its reply
to the statement of objections fails to mention that such purchases were not by
any means obligatory for CNR, but were, rather, carried out on a voluntary basis
according to the wording of the commitments entered into by EDF in the context
of the EDF/EnBW merger53. Moreover, far from making CNR dependent on

50

See Electrabel's reply of 7 April 2008 to question 2 in the Commission's request for information of
26 March 2008, which states that EDF did lose control over CNR in 2001, when the Gentot Committee
set up under Section 50 of the Law of 10 February 2000 laid down the conditions for the review of the
protocols governing industrial and commercial relations between the two companies, so that CNR
could gradually become an independent producer of electricity in its own right. Moreover, EDF
renounced the right to exercise the voting rights associated with the CNR shares which it held, andentrusted responsibility for these to a trustee.

51

Paragraph 90 of the CO notification form in case COMP/M.4994 - Electrabel/Compagnie Nationale
du Rhône states as follows: "In accordance with the joint declaration by CNR and EDF on theindustrial aspects of CNR's transformation into an independent producer in its own right, thecompanies have ceased joint operation of the transferred plants. They have thus defined the conditions
under which the planning and management of production would be carried out on a strictly temporary
basis by EDF for CNR and the conditions under which CNR would entrust EDF for a transitional
period with specific tasks to do with the operation of the hydroelectric plants on the Rhône, leaving
CNR with the responsibility for making major choices on industrial management; these tasks would
be entirely independent of the commercial decisions to be taken by CNR."

52

Suez's activity and sustainable development report for 2003. See in particular pp. 38 and 41.

53

EDF's commitment, which is attached as an annex to the above-mentioned decision, states: "EDF’s
services shall be limited to the technical operation and maintenance of these plants. These services
shall not comprise functions related to the optimisation (dispatching) or the commercialisation of the
production. Functions of this kind shall belong to CNR and be implemented by CNR’s own personnel.""EDF undertakes not to make any claim to the electricity generated by CNR or part thereof as from 31
March 2001 …. Accordingly, CNR will be in a position to act freely and independently, on its own orwith partners, on the eligible market, the wholesale market, with the RTE and with other French andEuropean producers. Furthermore, in order to allow CNR progressively to develop the marketing of
its entire production, EDF has offered CNR a purchase guarantee on the terms and conditions set out
hereunder. EDF undertakes to purchase, between 1 April 2001 and 1 April 2006, upon request of
CNR, part of its production as necessary to allow CNR progressive entry on the market."21

EDF, these arrangements were designed to enable CNR to enter the electricity
markets, as is set out in the text of the commitment. Finally, Electrabel fails toprovide any details of the amounts of electricity purchased by EDF. There is thus
no indication of what proportion of the electricity purchased from CNR isaccounted for by EDF.
•

Electrabel's assumption of the industrial role and operational
management

103.

After taking a stake in CNR, Electrabel acquired EDF’s shareholding on
23 December 2003. This acquisition complements the cooperation with CNR
which started in 200054.

104.

This cooperation arose in connection with the loosening of ties between EDF and
CNR and was stepped up when, in April 2001 (see above), CNR became anelectricity producer independent of EDF and was thus able to define its own
industrial and commercial strategies. This process, together with Electrabel'sacquisition of a holding in CNR in 2003, led to Electrabel's taking over theindustrial role and operational management which previously fell to EDF within
CNR. As of 2003, Electrabel took over operational control over CNR,
considering CNR's power stations as part of its own electricity generation
capacity.

105.

Electrabel's takeover of the industrial role and operational management within
CNR was facilitated by the signing on 28 November 2000 of a frameworkagreement between Electrabel and CNR. The purpose of the frameworkagreement, apart from the conclusion of a number of commercial agreements andagreements on assistance, was to set up a joint subsidiary, Energie du Rhône(EDR). On 28 August 2001, CNR and Electrabel signed an associates’ agreement
laying down the terms of their commercial relations within EDR.

106.

EDR plays a vital role in the activities of CNR. This consists in: (i) identifying
and analysing useful market segments, (ii) prospecting, researching andidentifying potential clients, (iii) canvassing those customers and presenting them
to Electrabel France and CNR, (iv) assisting in the preparation of offers andcontracts, (v) providing the commercial and contractual back-up for customers,and (vi) preparing the necessary invoicing particulars.

107.

Under the associates’ agreement already referred to, the eligible customers
canvassed by EDR are presented first to CNR. If CNR refuses or is unable tosupply the customer, then the customer is introduced to Electrabel France.

54

The minutes of the general meeting of CNR held on 27 June 2000 confirm that, in view of theloosening of its ties with EDF, the link-up between CNR and a major electricity generator is essential:(p. 7) : "He [the chairman of the board of directors] reminded shareholders that, in addition to thepartnership with Caisse des Dépôts, he had imagined a strategic global partnership with theparticipation of private minority capital. He proposed that the majority nature of CNR's public capitalbe laid down in law and this was accepted by the Suez Lyonnaise des Eaux/Electrabel group, which
had shown the greatest interest … He [the chairman of the board of directors] added that he had madethis proposal since he was convinced that the association with a major electricity generator, in
whatever form, was indispensable to CNR both at technical level and at commercial level". This
strategic approach was then regularly confirmed at general meetings: see the minutes of the general
meeting of 27 June 2002 (p. 4), at which the Government representative made the following statement:"The rationale for the industrial and commercial project, which takes the form of a partnership with
Suez in Energie du Rhône, remains valid; the aim is to enable CNR to play its role as the second
independent French producer. This is why a rapprochement with an industrial partner such as Suezwould no doubt be beneficial."
22

108.

CNR and Electrabel hold 51% and 44% respectively of the capital (and voting
rights) of EDR, with CDC holding the remaining 5%. Under the articles ofassociation of EDR (Article 16.1), its board of directors comprises two Electrabel
representatives and three representatives, including the chairman, from CNR.

109.

However, even though CNR holds 51% of the capital and voting rights in EDR as
well as an absolute majority on the board of directors, Electrabel exerts adetermining influence over EDR.

110.

For one thing, a certain number of strategic decisions, such as the approval of thebudget, the appointment of employees to, and their dismissal from, management
functions, and proposals to the general meeting to appoint or dismiss thechairman on a proposal from CNR, require unanimity within the board of
directors. For another, the general manager of EDR, who is responsible for thecompany's general operational management, is appointed unanimously by theboard of directors on a proposal from Electrabel.

111.

As well as setting up EDR, Electrabel and CNR signed simultaneously or
subsequently a series of technical and commercial partnership agreements toincrease their cooperation, mainly in 2001 and 200455.

112.

At the ordinary general meeting of CNR on 25 June 2003, CNR’s chairman statedthat "CNR started to give consideration to bringing together a commercial and an
industrial partnership once it knew that Electrabel would acquire a shareholding.
Electrabel thus became our main commercial partner with close on [30-40]* %of sales and the rapid expansion of Energie du Rhône." The rapid expansion andimportance of EDR in terms of electricity sales are confirmed by the ratio of thevolume of electricity sold by EDR to the volume of electricity sold by CNR overthe period 2002-2007 (see table below)56:
Share (as %) of the volume of electricity
sold by EDR in the volume of electricity
sold by CNR
2002 2003 2004 2005 2006 2007
[0[5- [10- [30- [20- [205]* 10]* 20]* 40]* 30]* 30]*

113.

Electrabel claims in its reply to the statement of objections that it did not fully
take on the industrial role and operational management until 2006, as CNR in fact
concluded important long-term partnerships with both EDF and Electrabel from2001 onward.

114.

Firstly, Electrabel claims that the issue of sole control over the joint subsidiary,
EDR, is irrelevant. It points out that the Commission was notified of theestablishment of EDR, and that on 29 November 2002 it granted its authorisation

55

They include contracts and agreements (see e-mail from Electrabel dated 13 October 2008) concerning(i) the sale of electricity by CNR (framework contract for purchasing options on forward contracts forbuying electricity (28 August 2001), a supply and guarantee contract (28 August 2001) and an off-takecontract (28 August 2008)); (ii) a remote control project (26 September 2004); (iii) a contract for thesale of TUVV EE02 certificates (11 October 2006); and (iv) a contract for the sale of green certificatesby CNR to Electrabel (31 March 2008).

56

Source: Electrabel's reply of 13 October 2008 to the Commission's request for information of
29 September 2008.
23

to an agreement on the setting up of a "cooperative" rather than a “concentrative”
joint venture. Electrabel argues that this operation cannot, therefore, be
considered as having resulted in any form of exclusive control by Electrabel over
CNR.
115.

Electrabel therefore argues that the analysis set out in the statement of objections
contradicts the Commission's analysis in its letter closing the examination of theestablishment of EDR. It points out that the Commission had noted that the factthat CNR prioritised supplying customers canvassed by EDR represented a
restriction of competition within the meaning of Article 81(1) of the EC Treaty,
but had nonetheless granted an individual exemption under Article 81(3) of the
EC Treaty for a length of time equal to the period of EDF's gradual divestment of
its holdings in CNR.

116.

Furthermore, Electrabel takes the view that the statement of objections fails to
explain how this agreement was supposed to influence the analysis of the facts on
23 December 2003.

117.

Electrabel's argument is not well founded.

118.

Firstly, it should be recalled that Electrabel exercises decisive influence over
EDR, a fact which it does not deny.

119.

Secondly, as noted in the statement of objections57 and as mentioned above, thechairman of CNR pointed out at the general meeting of 25 June 2003 that as soon
as Electrabel took a holding in CNR, EDR underwent a rapid expansion. This isan element in Electrabel's key role in CNR's operational management.

120.

Thirdly, as Electrabel indicates in its reply to the statement of objections, theestablishment of EDR was notified in accordance with Article 81 of the EC
Treaty on 21 December 2001, and the Commission's authorisation dates from 29
November 2002, that is, before Electrabel took a holding in CNR in June 2003
and acquired EDF's shareholding in CNR in December 2003. Thus the newdevelopment was indeed Electrabel's acquisition of a holding in CNR, which led
to Electrabel's acquiring 47.92% of voting rights on 23 December 2003; EDR
must be taken into account in this context.

121.

At the hearing, Electrabel listed other factors which it said supported its view thatit had not acquired control over the CNR before 2007: (i) the complete
withdrawal of EDF from CNR, which took place only at the end of 2006, (ii) thefact that Electrabel became the only industrial shareholder, and the strengtheningof commercial cooperation between Electrabel and CNR, and (iii) the launch of a
joint brand, "EBL France – CNR", in April 2007.

122.

These elements, taken separately or together, do not demonstrate that Electrabel
acquired de facto sole control only in 2007.

123.

Firstly, the argument as to the complete withdrawal of EDF at the end of 2006
cannot be accepted because, as demonstrated in paragraph 100 and acknowledged
by Electrabel itself, the agreements concluded between EDF and CNR for theperiod 2001-2006 could not have granted grant EDF a decisive influence over
CNR from 2001. In any event, EDF had ceased to be a shareholder in CNR on
23 December 2003, the date on which its holding in CNR was effectivelytransferred to Electrabel. Thus the agreements concluded with EDF could not

57

Paragraph 55 of the statement of objections.
24

prevent Electrabel from acquiring control of CNR from 23 December 2003
onward.
124.

Secondly, it is not correct to state, as Electrabel does, that Electrabel became theonly industrial shareholder in CNR in 2007: that happened in 2003.

125.

Thirdly, as stated above, most of the industrial and commercial agreements
between Electrabel and CNR were concluded between 2001 and 2004, and thestrengthening of such agreements was not an event triggering the acquisition ofde facto sole control over CNR.

126.

Finally, Electrabel provides no reasoning to explain why the launch of a common
commercial brand by Electrabel and CNR in 2007 should constitute an event
triggering the acquisition of control by Electrabel over CNR. Indeed it can beargued that the launch of the brand was possible precisely because Electrabel
already controlled CNR.
5)

Since 2004 CNR has been regarded de facto as forming part of theSuez group both by the managers of CNR and by the managers of
Suez

127.

A number of CNR internal documents, including the minutes of the management
board and of the supervisory board, reveal that in 2004 CNR had embarked on agroup strategy vis-à-vis Suez. CNR's participation in the Suez group is mentioned
repeatedly, as the following extracts show.

128.

At its meeting on 19 March 2004, the management board decided to put before
the next general meeting "a resolution opposing the idea of a capital increasethat will be reserved for employees since this arrangement is not adapted to anunlisted company that is the subsidiary of a large industrial grouping. By
contrast, CNR employees should be able to have access to the SPRING plan put
in place by the Suez group (under conditions still to be determined)". At thatsame meeting, the management board made the point that, as regards retirements,"CNR and Suez Electrabel … are going to meet a number of stakeholders to
defend the group's point of view as expressed in particular in the UFE [Union
Française de l'Electricité] compromise"58.

129.

The management board meeting on 18 January 2005 discussed the representationof the Suez group within the UFE. The intention was that the Suez group would
be represented by CNR, SHEM and Suez59.

130.

At the supervisory board meeting on 8 December 2005, which was attended forsome of the time by Mr [...]* of Suez, the latter emphasised "the determination ofSuez to develop its energy activities in France by using CNR as the flagship forthe development of renewable energies and external growth projects in thisstrategic field"60.

58

Minutes of the meeting of the management board on 19 March 2004, p. 2.

59

Minutes of the meeting of the management board on 18 January 2005, p. 2.

60

Minutes of the meeting of the supervisory board on 16 March 2006, p. 7. Statement by Mr [...]* madeat the previous meeting of the supervisory board, on 8 December 2005, and referred to by Mr [...]* of
the CNR management board, at the meeting of the supervisory board on 16 March 2006.
25

131.

At the supervisory board meeting on 28 September 2006, when discussing the
GDF/Suez merger, the representative of Electrabel, Mr [...]*, stated that "CNR
was involved in this planned merger. Indeed, it must participate in thisdevelopment like all the companies of the Suez and Gaz de France group"61.

132.

An internal Electrabel memo of 10 November 2006 concerning CNR's financing
and investment policy suggests that "in line with a group strategy, CNR could
invest some of its cash resources in the Suez/Electrabel group" and that "asregards financing, CNR could have recourse to the group for any new
financing"62.

133.

At the supervisory board meeting on 8 December 2006, one of the CNR directors,
Mr [...]*, spoke of "the participation of CNR in the insurance programmes of theSuez group and in the mutualised tranche of the civil liability programmes"63.

134.

At the general meeting on 28 June 2007, [a member]* of the CNR supervisoryboard, [...]*, took the view that CNR "now occupies an exemplary position within
the Suez group"64. [A member]* of the management board, Mr [...]*, when
discussing international expansion, stated that "these (international) markets havebeen gained by CNR on its own or in a consortium with other Suez groupsubsidiaries"; he welcomed the "truly synergistic work done by CNR and anumber of Suez group subsidiaries"65.

135.

Lastly, at the supervisory board meeting on 13 December 2007, Mr [...]*, one ofthe directors of CNR, "had been entrusted with a coordination task so as to avoid
any contradiction between the development plans of CNR and Compagnie duVent [a wind energy company recently acquired by Electrabel]”66.

136.

At that same meeting, Mr [...]*, a representative of Electrabel, asked that CNR'shydrological development projects be approved in "a document formally settingout the matters at issue and the amounts with a view to their approval by Suezand by the supervisory board"67; he also stressed "the synergy achieved between
the design departments of CNR and the Suez group"68.

61

Minutes of the meeting of the supervisory board on 28 December 2006, p. 20.

62

Internal memo from Electrabel's Treasury and Finance Department entitled "CNR financing andinvestment policy", addressed to Messrs [...]*.

63

Minutes of the meeting of the supervisory board on 8 December 2006, p. 10.

64

Minutes of the combined (ordinary and extraordinary) general meeting of shareholders of 28 June
2007, p. 4.

65

Minutes of the combined (ordinary and extraordinary) general meeting of shareholders of 28 June
2007, p. 5.

66

Minutes of the meeting of the supervisory board on 13 December 2007, p. 8.

67

Minutes of the meeting of the supervisory board on 13 December 2007, p. 9.

68

Minutes of the meeting of the supervisory board on 13 December 2007, p. 10.
26

137.

Moreover, the annual activities reports of Suez and Electrabel, which are public
documents, confirm the information from internal documents that has been notedin the preceding paragraphs.

138.

The Suez annual report for 2003 (situation as at 31 December 2003) states on
page 38 that: "In addition to these three subsidiaries, the Group holds equity
stakes in Europe which have had a varied experience in 2003: in France,
Electrabel took operational control of Compagnie Nationale du Rhône (CNR)”.
On page 41, the same 2003 annual report presents a graphic entitled "Electrabel:renewable energy capacity" that includes CNR's hydraulic production capacity.

139.

Similarly, Electrabel's annual report for 2004 (situation as at 31 December 2004)
includes CNR's electricity production capacities within those of Electrabel, andalso states that Electrabel provides operational management for CNR69.

140.

Electrabel states in its reply to the statement of objections that the Commission
has interpreted these documents incorrectly.

141.

Electrabel challenges the relevance of the extracts quoted by the Commission.
Electrabel stresses that all but one relate to statements made after 2004.
Moreover, Electrabel points out that some of them relate to specific arrangements
within the Suez group whose application to CNR had been envisaged (retirement
scheme for CNR employees, financing policy within the Suez group), but which
in fact still did not apply to CNR at the end of 2006. Lastly, according toElectrabel, the statement of objections did not take into account other statementsthat contradicted the extracts cited there.

142.

Electrabel's arguments are not well founded.

143.

First of all, it should be noted that Electrabel does not discuss, and so does notcontest, the content of three extracts.

144.

The first extract concerns the meeting of the management board on
19 March 2004 (paragraph 58 of the statement of objections): "At that same
meeting, the management board made the point that, as regards retirements,‘CNR and Suez Electrabel … are going to meet a number of stakeholders to
defend the group's point of view as expressed in particular in the UFE [Union
Française de l'Electricité] compromise.’"145.

The second extract concerns the management board meeting on 18 January 2005
(paragraph 59 of the statement of objections): "The management board meetingon 18 January 2005 discussed the representation of the Suez group within the
UFE. The intention was that the Suez group would be represented by CNR,SHEM and Suez."

69

Electrabel annual report for 2004, p. 63: "The company also has installed capacity of 3 710 MW from
Compagnie Nationale du Rhône (CNR) whose output mainly comes from run-of-river power stations(19 stations); and 773 MW from Société Hydroélectrique du Midi (SHEM), mainly composed of peakcapacity (49 power stations). In 2004, Electrabel raised its stake in CNR to 49.95%, for which it
provides operational management. Its control of SHEM capacities will be further consolidated withthe agreement reached in November 2002 with SNCF: Electrabel acquired a 40% stake in SHEM
early in 2005 and will increase its share to 80% in 2007." Moreover, the table on p. 93 of the annual
report for 2004, entitled "profile of power stations - situation on 31.12.2004", which highlights
Electrabel's production capacities, makes explicit reference to CNR's 19 production installations.
27

146.

Lastly, the third extract concerns the supervisory board meeting on
8 December 2006 (paragraph 62 of the statement of objections), during which"one of the CNR directors, Mr [...]*, spoke of the participation of CNR in theinsurance programmes of the Suez group and in the mutualised tranche of thecivil liability programmes".

147.

Second, the extracts dating from 2005-2006 show that CNR was considered as
belonging de facto to the Suez group before June 2007, the date on which
Electrabel maintains that it acquired de facto control of CNR.

148.

Third, the fact that CNR did not, at the end of 2006, benefit from certain
arrangements reserved for the Suez group is irrelevant. The very fact that the
managers of CNR and Electrabel considered CNR to be eligible for thesearrangements is an indication that CNR was de facto deemed to belong to Suez.

149.

Fourth, Electrabel mentions only two extracts which it says the Commission
failed to take into account in the statement of objections.

150.

On the one hand, Electrabel mentions the supervisory board meeting on
7 July 2005, which it has already referred to, during which it was stated that the
majority of CNR's share capital would remain in public ownership because of the
Murcef Law. According to Electrabel, this statement shows that CNR was notconsidered as belonging to the Suez group.

151.

In fact, it is possible to conclude from that statement only that Electrabel, becauseof the Murcef Law, was not in a position to acquire de jure control over CNR.
However, it is not possible to infer that Suez (via Electrabel) was not in a position
to exercise de facto control over CNR. Accordingly, the statement does notcontradict the extracts used by the Commission in the statement of objections.

152.

Electrabel also mentions a statement that it maintains was made by the
representative of the State at the supervisory board meeting on 5 July 2007, who"wanted 2008, the year in which the Suez group was reorganised, also to be theyear in which responsibilities are clarified within the configuration constituted by
Suez/Electrabel on one side and CNR on the other, so that CNR's role in the
future would be clearly defined"70.According to Electrabel, this statement showsthat it is only with effect from 2007 that it is possible to identify statements that
actually reveal that CNR would soon belong to the Suez group.

153.

It should be pointed out at the start that the minutes of the supervisory board
meeting on 5 July 2007 do not contain such a statement71.

154.

Supposing that such a statement was made, it would be irrelevant. Electrabelcannot argue that it reveals that CNR would soon belong to the Suez group since,elsewhere, Electrabel maintains that it had exercised de facto control over CNR
since June 2007, before the date of the supervisory board meeting. Moreover, thestatement is concerned only with a clarification of responsibilities, which does not

70

Paragraph 100 of the reply.

71

Nor does such a statement figure in the minutes of the meeting of the supervisory board on
6 July 2007.
28

allow any conclusions to be drawn concerning the date on which Electrabel
acquired de facto control over CNR.
155.

Furthermore, in the reply to the letter setting out the facts of the case, Electrabel
challenges the view that the Suez annual report for 2003 and the Electrabel annual
report for 2004 strengthen the evidence that CNR was regarded de facto as
belonging to the Suez group as early as 2004. Electrabel stresses that the reports(i) do not corroborate the evidence drawn from Electrabel's industrial role within
CNR, and (ii) do not consider Electrabel's shareholding in CNR to be acontrolling one.

156.

Electrabel's argument is not well founded.

157.

With regard to the industrial role played by Electrabel within CNR, Electrabelrefers again to the argument that it has already developed concerning theimportance of the industrial role played by EDF within CNR. As shown above inparagraphs 99 to 102, that argument is not well founded. And to the observationthat the Suez and Electrabel reports include CNR's production capacity in that ofElectrabel, Electrabel's only objection is that the observation "is not of itself
sufficient to demonstrate that their managers regarded CNR as an entity subject
exclusively to de facto control." But the Commission has never claimed that theobservation is by itself decisive.

158.

With regard to Electrabel's argument that the reports in question do not present
the shareholding in CNR as a controlling shareholding, such an argument isirrelevant, as the concept of control for purposes of the consolidation of accounts
is outside the legal framework governing Community control of concentrations.
In any event, a company should not be allowed to avoid the rules on merger
control by invoking the decisions it has itself taken when drawing up its annual
accounts.
6)

Electrabel has [...]*

159.

The Agreement provides [...]*.

160.

For instance, under the Agreement, [...]*.

161.

In its reply to the statement of objections, Electrabel relies on point [...]* of thenotice of 10 July 2007 to argue that the fact that [...]* is not in itself enough toconfer de facto sole control over CNR72.

162.

First of all, on a formal level, the Commission would point out that the relevant
notice is not the notice of 10 July 2007 but the notice of 2 March 1998,
paragraph [...]* of which reads: "[...]*." But the rule is in any event substantiallythe same in the two notices.

163.

As pointed out above, [...]*, the Agreement allows Electrabel [...]*. Electrabel istherefore assured of having sole control on a durable basis, [...]*.

72[...]* of the notice of 10 July 2007 reads: "[...]*".
29

164.

Against this background, [this should be seen as an additional element which,
together with other elements, may lead to the conclusion that there is solecontrol]*.
7)

Conclusion

165.

For all the reasons set out in the present decision, it is clear that Electrabel has
indeed exercised sole control over CNR since 23 December 2003.

166.

In this regard, it should be noted that in the draft Form CO dated 17 January 2008
Electrabel arrived at the same conclusion. Electrabel first of all stated that it had
acquired de facto control of CNR in 2004: "in the light of the Commission's
decision-making practice, de facto sole control appears to have existed since2004, when Electrabel's share of the voting rights increased from 16.88% to47.92%"73. Electrabel confirmed this analysis, in more categorical terms, later inthe same document, where, following a discussion about control, it concluded:"under these circumstances, and in the light of the Commission's decision-making
practice, the parties take the view today that Electrabel has held de facto solecontrol over CNR since 2004"74. This draft Form CO was not subject to any legal
reservations.

167.

It should also be noted that the three allegedly new elements which arose between
the end of 2006 and July 2007, and on which Electrabel relies to conclude that it
acquired de facto control over CNR only in 2007, are not relevant: they are: (i)the decision of Electrabel's accounting department, at the end of 2006, toconsolidate the shareholding in CNR by the global integration method and not by
the equivalence method; (ii) a letter from the Commission Française deRégulation de l'Energie (CRE) dated 5 July 2007, in which the CRE consideredthat CNR and Electrabel were linked companies; and (iii) the general meeting of
CNR’s shareholders held on 8 June 2007, which confirmed that Electrabel had ade facto majority at the meeting.75

168.

First, the change in the method by which CNR is consolidated into Electrabel's
accounts is Electrabel’s own decision and does not constitute a new fact outside
Electrabel’s control.

169.

Second, the CRE's analysis is based merely on the finding that Electrabel has
been consolidating its shareholding in CNR globally since the 2006 financial

73

Draft Form CO, 17 January 2008, p. 18.

74

Draft Form CO, 17 January 2008, p. 27.

75

See Electrabel's letter dated 9 August 2007, already referred to: "The recent modifications that took
place in the exploitation and industrial organisation of CNR have led Electrabel to consolidate thisshareholding by the method of global integration for the establishment of accounts 2006, whereas itpreviously used the method of equivalence. The last general meeting of shareholders of CNR, which
took place last 28 June, confirmed that so far, Electrabel has de facto been able to gather a majority of
votes for its proposals. In addition, the Commission Française de Régulation de l'Energie took the view
last July that Electrabel and CNR were companies linked within the meaning of the Law on the publicenergy and gas service ". See also Form CO, paragraphs 111 to 115.
30

year76. In addition, the CRE is a national authority without any powers in relation
to Community competition law. Consequently, the CRE's decision does notconstitute a new fact to be taken into account here.
170.

Lastly, as explained in paragraphs 53 to 59, the general meeting of CNR’s
shareholders held on 8 June 2007 cannot be cited in order to show that themeeting determined the existence of control of CNR by Electrabel, or that control
could be identified only a posteriori.

171.

It may be pointed out that no significant changes in the governance of CNR
occurred between 23 December 2003 and 9 August 2007 (the date in which
Electrabel consulted the Commission). There were only marginal increases inElectrabel’s shareholding in CNR, which grew by 0.03% (from 49.95% to49.98% of the capital), and its voting rights, which grew by 0.05% (from 47.92%
to 47.97%), and the same corporate bodies (management board and supervisoryboard) remained in place. In addition, the relevant provisions of the Murcef Law
have remained in force without any amendment from 2001 to the present day.

172.

Electrabel thus failed to comply with its obligations under Regulation (EEC)
No 4064/89. The information set out above shows, at the very least, that
Electrabel acted negligently by putting into effect a concentration with a
Community dimension, in the form of the acquisition of sole control over CNR,
on 23 December 2003, and by referring this concentration to the Commission
only in August 2007.

173.

Therefore, Electrabel, which did not ask for exemption under Article 7(4) ofRegulation (EEC) No 4064/89, has committed an infringement, which is nottime-barred, of Article 7(1) of that Regulation, according to which aconcentration is not to be implemented until it has been notified and declaredcompatible with the common market.

V.

DECISION TO IMPOSE FINES174.

For these reasons, the Commission concludes that Electrabel acquired sole controlof CNR on 23 December 2003. Electrabel has put into effect a concentration witha Community dimension from 23 December 2003, in breach of Article 7(1) ofRegulation (EEC) No 4064/89.

175.

Under Article 14(2)(b) of Regulation (EEC) No 4064/89, the Commission may bydecision impose on the undertakings concerned within the meaning of Article 5fines not exceeding 10% of the aggregate turnover of the undertakings concerned
where, either intentionally or negligently, they put into effect a concentration inbreach of Article 7(1) of that Regulation.

176.

Article 14(2)(b) of Regulation (EC) No 139/2004 likewise provides that theCommission may by decision impose on the undertakings concerned within the76

Letter from the CRE dated 5 July 2007 to Electrabel France, regarding the compensation of the costsof TaRTAM – T1 2007: “with regard to the information in its possession, in particular note 35 to theconsolidated accounts presented in Electrabel SA’s annual report for 2006, the CRE considers that
Electrabel France has to be regarded as linked to CNR within the meaning of Article 30-2 of the Lawof 9 August 2004. According to this note, it is the situation of de facto control of Electrabel SA over
CNR which has justified the consolidation of CNR by global integration into the accounts of Electrabel
SA, which controls Electrabel France".
31

meaning of Article 5 fines not exceeding 10% of the aggregate turnover of theundertaking concerned where, either intentionally or negligently, they implement
a concentration in breach of Article 7 of that Regulation.
177.

Regulation (EEC) No 4064/89 and Regulation (EC) No 139/2004 therefore
provide for the same penalty for breach of Article 7 involving the implementationof a concentration before it has been declared compatible by the Commission.
Against this background, Electrabel cannot claim that there is a subsequent andless severe provision that ought to be applied.

178.

Moreover, under Article 1 of Council Regulation (EEC) No 2988/74 of
26 November 1974 concerning limitation periods in proceedings and theenforcement of sanctions under the rules of the European Economic Community
relating to transport and competition77, the limitation period in proceedings is (i)three years in the case of infringements of provisions concerning applications or
notifications of undertakings or associations of undertakings, requests for
information, or the carrying out of investigations, and (ii) five years in the case of
all other infringements.

179.

Under Article 1 of Regulation (EEC) No 2988/74, therefore, the limitation period
for an infringement of Article 7(1) of Regulation (EEC) No 4064/89 is five years.

180.

Furthermore, Article 2 of Regulation (EEC) No 2988/74 provides that any action
taken by the Commission for the purpose of the preliminary investigation orproceedings in respect of an infringement interrupts the limitation period inproceedings. On the basis of Article 11(2) of Regulation (EC) No 139/2004, theCommission sent an initial request for information to Electrabel on 17 June 2008
for the purpose of the preliminary investigation of the said infringement, and thena statement of objections on 17 December 2008. The limitation period in respectof the infringement of Article 7(1) of Regulation (EEC) No 4064/89 wastherefore interrupted by the request for information dated 17 June 2008, and by
the statement of objections of 17 December 2008.

181.

In its reply to the statement of objections, Electrabel submits that the statement ofobjections does not explain why out of two alternative limitation periods theperiod applicable to the alleged infringement should be the five years for “otherinfringements” rather than the three years for “infringements concerning
notifications of undertakings”. Electrabel acknowledges that the Regulation does
seem to distinguish between procedural and substantive infringements.

182.

It must be observed that an infringement consisting of putting into effect aconcentration in breach of Article 7(1) of Regulation (EEC) No 4064/89 is not
merely an absence of notification, but conduct that produces a structural change
in the conditions of competition. It must also be observed that as regards penalties
Regulation (EEC) No 4064/89 makes a distinction between infringements ofArticle 4, on the obligation to notify, where the penalty ranges from € 1 000 to€ 50 000, and infringements of Article 7, where the maximum fine is 10% of theaggregate turnover. This confirms that infringements of Article 7 are of a
substantive nature (like the other infringements that incur a fine of up to 10% of

77

OJ L 319, 29.11.1974, p. 1.
32

turnover), rather than of a procedural nature. Thus Electrabel’s objection is notwell founded.
183.

Consequently, the infringement committed by Electrabel is not time-barred.

184.

Under Article 14(3) of Regulation (EEC) No 4064/89, the Commission must haveregard to the nature and gravity of the infringement in setting the amount of afine. The Commission also takes account of the duration of the infringement andof any aggravating or mitigating circumstances.

185.

In addition, the imposition of fines for implementation of a concentration in theabsence of notification is not unprecedented. The Commission has imposed fines
on these grounds twice: in its Decision of 18 February 1998 in case IV/M.920
Samsung/AST78, and in its Decision of 10 February 1999 in case IV/M.969
A.P. Møller79.
1)Nature of the infringement

186.

The seventeenth recital to Regulation (EEC) No 4064/89 states: "to ensure
effective control undertakings should be obliged to give prior notification ofconcentrations with a Community dimension and provision should be made forthe suspension of concentrations for a limited period, and for the possibility ofextending or waiving a suspension where necessary".

187.

By making concentrations with a Community dimension conditional upon
notification and prior authorisation, the Community legislature wanted to ensurethat such concentrations were subject to effective control by the Commission,
allowing the Commission where appropriate to prevent such concentrations frombeing carried out before it takes a final decision, thereby avoiding irreparable andpermanent damage to competition.

188.

The Commission therefore regards the infringement committed by Electrabel as aserious one, in that it undermines the effectiveness of Community provisions on
the control of concentrations.

189.

In its decision in the A.P. Møller case, the Commission stressed that: "TheCommission has a duty to uphold the basic principle that undertakings should bedeterred from carrying out concentrations falling within the scope of the Merger
Regulation without making appropriate notifications, and it should therefore use
the powers granted to it by the Council for that purpose" 80.

190.

In this context, an undertaking implementing a concentration with a Community
dimension without obtaining prior authorisation unilaterally eludes the78

OJ L 225, 26.8.1999, p. 12.

79

OJ L 183, 17.7.1999, p. 29.

80

Commission Decision of 10 February 1999 in case IV/M.969 A.P. Møller, paragraph 22.
33

requirement of ex ante control by the Commission laid down by the Community
legislature81, and thus weakens the Community legal order.
191.

In conclusion, any infringement of Article 7(1) of Regulation (EEC) No 4064/89
is by nature a serious infringement.
2)

Gravity of the infringement

192.

In its reply to the statement of objections Electrabel considers that theseriousness of an infringement has to be assessed in the light of the effects of thetransaction on competition82. Therefore, according to Electrabel, an infringementof Article 7(1) of Regulation (EEC) No 4064/89 cannot be considered serious if
the transaction carried out without authorisation does not cause permanent
damage to competition.

193.

It must be borne in mind that by its nature the infringement at issue breaches themost basic principle of the Community system of merger control, which is ex ante
control. Unlike Articles 81 and 82 of the EC Treaty themselves, the Community
legislature has expressly conferred on the Commission the sole power to assess
concentrations with a Community dimension. To protect this basic principle thelegislature has laid down heavy penalties (up to 10% of the turnover of theundertakings concerned) in case of infringement.

194.

The Commission takes the view that the presence of damage to competition
would indeed render the infringement more serious, and that the absence of any
such damage in the present case is an important factor to be taken into account indetermining the amount of the fine. However, the fact that the transaction does
not raise competition concerns does not take away from the seriousness of theinfringement83.

195.

In addition, the Commission considers that Electrabel has acted negligently in thecase at hand for the following reasons:a) Electrabel is a large company

196.

First, Electrabel is a large company with substantial legal resources at its disposal.

197.

It is also a company that, like its parent company Suez (head of the Suez group),
has been faced with obligations under Community law on many occasions, inparticular with regard to the control of concentrations between enterprises sincesuch control has existed. A number of Commission decisions in the field ofcontrol of concentrations have been taken concerning Electrabel, whether as adirect84 or indirect85 notifying party. It is therefore a company that is familiar with81

See the judgments of the Court of Justice in Case C-170/02 Schlüsselverlag J. S. Moser and Others v
Commission [2003] ECR I-9889, paragraph 32, and Case C-42/01 Portugal v Commission[2004] ECR I-6079, paragraph 50.

82

Reply to the statement of objections, paragraphs 159 and 160.

83

See in particular the Commission Decision in case COMP/M.2624 BP/Erdölchemie, paragraph 51.

84

See cases COMP/M.3003 Electrabel/Energia Italiana/Interpower, COMP/M.2712
Electrabel/TotalFinaElf/Photovoltech, and COMP/M.1803 Electrabel/EPON.
34

Community merger legislation and has sufficient legal resources to consider theneed to notify a concentration86.
b) Acquisition of control was foreseeable198.

As set out in particular in paragraphs 53–56, the provisions governing
Community control of concentrations applicable in 2003 with regard to theacquisition of a minority shareholding conferring de facto control were clear andunconditional, both from a reading of paragraph 14 of the notice of 2 March 1998
and from the Commission's decision-making practice.

199.

In the case in question, in view of the above, and in particular the acquisition as
early as December 2003 of such a large proportion of the share capital and voting
rights compared with the remaining shares, other than those held by CDC, whichwere widely dispersed, Electrabel ought clearly either (i) to have been aware of
the fact that it had sole control over CNR or (ii) at the very least to haveconsidered this possibility, which should have prompted it to consult theCommission, as is custom (a custom with which a company the size of Electrabel
is familiar)87.

200.

CNR is also a large undertaking, being the second producer of electricity inFrance, with a turnover of €401 million in 2002 and €553 million in 2003, and theacquisition of EDF’s holding in CNR was the consequence of commitments given
by EDF to the European Commission in case M.1853 EDF/EnBW.

85

See, for example, case M.4180 GDF/Suez, notified to the Commission on 10 May 2006. In particular,
see case IV/M.343 Société Générale de Belgique/Générale de Banque (in which the Suez group was
the notifying party), where it was established that an increase in the capital participation from 20.94%
to 25.96% was such as to lead to a change of ownership of control, it being understood that (i) thiscase is cited in paragraph 59, on de facto sole control, of the notice of 10 July 2007, and (ii) it had
previously been cited in paragraph 14 of the notice of 2 March 1998, although the capital holding
involved was of much smaller magnitude than in the present case. It may be pointed out that Suez wasparticularly well acquainted with case IV/M.343 Société Générale de Belgique/Générale de Banque,because Société Générale de Belgique was a subsidiary of Compagnie de Suez, as the Suez group wascalled at that time.

86

See, in particular, Commission Decision of 10 February 1999 in case IV/M.969 A.P. Møller, paragraph
14: "In order to qualify A.P. Møller’s behaviour, it is necessary to take into account that it is a verylarge European undertaking with significant activities in Europe and was previously, and is presently,
involved in competition cases, both as a complainant and defendant, with the assistance of specialised
advisors. A.P. Møller is a member of the Shipping Association which has an office in Brussels andoffers advice to its members. Also, A.P. Møller has its own legal department at its head office in
Copenhagen. Therefore, A.P. Møller must be expected to be aware - and even have a good knowledge- of Community legislation, including merger control, and it clearly possesses the means to obtainlegal advice in order to consider, or at least question, whether its company structure would make someof its operations qualify as a notifiable concentration. Furthermore, the Merger Regulation and theCommission’s notice are clear on the interpretation to be given to the notion of a group. It seems
therefore reasonable to expect that A.P. Møller should have shown a larger degree of awareness of thelegal requirements and regard for them."

87

See, in particular, paragraph 6 of the Directorate-General for Competition’s notice on best practices on
the conduct of EC merger proceedings,
http://ec.europa.eu/competition/mergers/legislation/proceedings.pdf.
35

201.

Against this background, if Electrabel, as it maintains, had taken full account of
the Commission's established decision-making practice in this field88, it shouldhave referred the matter to the Commission as early as December 2003, if
necessary as part of a consultation process, as it did in 2007.

202.

Electrabel was even better placed to consult the Commission rapidly since it
already knew as early as July 2003, as indicated above, that it was going toacquire the shares held by EDF. This is reflected not only in the Agreement
signed on 24 July 2003 but also in the composition of the management board andof the supervisory board, both appointed on 8 July 2003, ahead of the actual
implementation of the Agreement.

203.

In the reply to the statement of objections, Electrabel states that the infringement
alleged by the Commission is at most a straightforward error on Electrabel’s part,the gravity of which should be assessed in the light of the complexity of the legal
and factual analysis that is needed to demonstrate de facto sole control in thecase89. At the hearing, Electrabel stated that at the time it had considered the need
to notify the transaction, or at the very least consult the Commission, but that in
the end it had decided not to do so.

204.

For the reasons set out throughout this Decision, the Commission maintains thatthe acquisition of control was clear on 23 December 2003. However, evenassuming that the establishment of control was "extremely complex" (and theCommission considers that it was not), the logical and usual course for acompany faced with the application of Regulation (EEC) No 4064/89 (as indeedof Regulation (EC) No 139/2004) should have been at least to consult theCommission. Accordingly, the Commission takes the view that Electrabel has
shown the negligence referred to in Article 14(2) of Regulation (EEC)
No 4064/89 (“where, either intentionally or negligently”).
c) Existence of precedents

205.

By contrast with the situation in the period when Commission decisions wereadopted in the Samsung/AST and A.P Møller cases, in the case at hand Regulation(EEC) No 4064/89 had already been in force for some time (more than thirteen
years on 23 December 2003) and the Commission had already proceeded against
other companies and imposed fines on them for breach of Article 7(1) of that
Regulation. The Commission has also adopted a number of other decisions on thebasis of Article 14 of the same Regulation, which is very clear in terms of its
scope and the powers conferred on the Commission.

206.

Electrabel cannot therefore rely on any lack of experience or of decision-making
practice, in particular with regard to the implementation of Articles 7 and 14 ofRegulation (EEC) No 4064/89.

88

As spelt out in paragraph 14 of the notice of 2 March 1998, and confirmed by paragraph 59 of thenotice of 10 July 2007.

89

Paragraphs 164-168 of the reply to the statement of objections.
36

3)

Duration of the infringement

207.

Electrabel acquired sole control of CNR on 23 December 2003. On
9 August 2007 Electrabel contacted the Commission and began to supply it withall the information needed (i) to assess whether there was a concentration with a
Community dimension and (ii) to prepare the case for notification.

208.

In its reply to the statement of objections, Electrabel submits that the duration of
the infringement, assuming there was an infringement, should be significantly
reduced, because it should be taken to have started in 2006, as most of theevidence for the acquisition of control set out in the statement of objections issubsequent to December 2003; in any event, control should be held to have beenacquired no earlier than 29 June 2004, as this was the date of the first general
meeting of shareholders after the acquisition of the CNR shares previously heldby EDF.

209.

With regard to the date on which the alleged infringement ended, Electrabel takes
the view that it would be quite unjustifiable to take account of the time thatelapsed between the date on which Electrabel first contacted the Commission(9 August 2007) and the date on which it formally notified the transaction(26 March 2008). Electrabel points out that it contacted the Commission on
9 August 2007 and on that date began providing the Commission with all theinformation it needed to carry out its assessment90.

210.

With regard to the date on which the infringement began, the Commission
considers that it must be the date on which Electrabel acquired EDF's holding,which gave it de facto control of the general meeting of shareholders, that is tosay 23 December 2003. Electrabel already controlled CNR’s management board
since the general meeting of shareholders and the meeting of CNR's supervisoryboard in June 2003, ahead of the Agreement with CDC concluded in July 2003.

211.

As regards the end of the infringement, the Commission would point out thatonce a concentration has been implemented, and for as long as it continues to be
implemented, a breach of Article 7 can end only when the Commission authorises
the concentration or grants exemption.

212.

Electrabel did not ask for exemption under Article 7(4) of Regulation (EEC)
No 4064/89 either before or after the consultation that began on 9 August 2007.
Accordingly, the duration of the infringement from the unauthorised acquisitionof sole control of CNR to the authorisation of the concentration by theCommission is four years, four months and seven days.

213.

A long time elapsed between the date on which Electrabel acquired sole controlof CNR (23 December 2003) and the date on which it informed the Commission(9 August 2007), and between the date on which it informed the Commission(9 August 2007) and the date on which it notified the transaction(26 March 2008).

90

Paragraph 180 of the reply to the statement of objections.
37

214.

The time Electrabel took to notify the transaction is especially long consideringthat the transaction related essentially to the energy markets which had recently
been studied carefully by the Suez group in connection with the merger between
GDF and Suez (which was notified to the Commission on 10 May 2006, and was
the subject of a Commission decision on 14 November 2006). For example,
between Electrabel’s letter of 9 August 2007 and the first draft Form CO,
submitted to the Commission departments on 7 December 2007, almost fourmonths had passed.

215.

Nevertheless, although the concentration was actually notified only on
26 March 2008 and authorised by the Commission on 29 April 2008, theCommission, exercising its discretion and without prejudice to its general
position of principle, will not take account of the period of pre-notification andexamination of the concentration. The Commission therefore makes a finding of
infringement only up to 9 August 2007.

216.

The period which the Commission has to take into account in determining thefine in this case is consequently three years, seven months and 17 days, which is avery long time, because, as has already been pointed out, there was no significant
change between December 2003 and August 2007 (i) in the shareholding andvoting rights in CNR held by Electrabel, (ii) in the composition of the governing
bodies in place (management board and supervisory board) or (iii) in any otheraspect likely to call into question the holding by Electrabel of sole control over
CNR.

217.

In its decision in case IV/M.969 A.P. Møller, cited above, the Commission took
the view that the risk of prejudice to the consumer increased with the duration of
the infringement, and although the infringement committed there lasted for lessthan the infringement in the present case, the Commission considered that it had
lasted for a significant time91.
4)

Mitigating circumstancesa) Electrabel brought the matter to the Commission’s attention on its
own initiative218.

The Commission notes that Electrabel contacted the Commission on its own
initiative on 9 August 2007, which constitutes a mitigating circumstance. It
should be pointed out, though, that this was more than three and a half years after
it had acquired EDF’s holding.
b) Cooperation with the Commission

219.

91

Electrabel states that it then cooperated fully with the Commission throughout the
notification procedure and thereafter, responding as quickly as possible and fully
to the Commission's requests for information. In the statement of objections theCommission acknowledged that Electrabel had cooperated. But it must be
observed that the period of pre-notification was long: Electrabel submitted a firstdraft Form CO only on 7 December 2007, almost four months after it had
contacted the Commission.

Commission Decision of 10 February 1999 in case IV/M.969 A.P. Møller, paragraph 19.
38c) Non-concealment of the shareholding in CNR
220.

Electrabel stresses that during the period 2004-2007, it never sought to conceal
the level of its shareholding in CNR and its involvement in CNR's activities, andtakes the view that this constitutes a mitigating circumstance.

221.

The fact that Electrabel did not conceal its shareholding or its involvement in
CNR, in particular in connection with the notification in case COMP M.4180
GDF/Suez, does not constitute a mitigating circumstance.

222.

The fact that the Commission did not investigate this aspect does not create apresumption of legality. Electrabel was in possession of all the informationneeded for an analysis of the situation with regard to control of CNR, andinfringed its obligation to suspend the implementation of the transaction until
such time as it had notified it and obtained the Commission’s authorisation.

223.

At best, the fact that the Commission did not investigate this aspect might tend toshow that Electrabel believed in good faith that its shareholding in CNR did notconfer control over CNR. However, the Commission notes that for infringementof Article 7(1) of Regulation (EEC) No 4064/89, Article 14 of that Regulation
does not require intent; the Commission therefore considers that Electrabel's
behaviour constituted negligence and was not necessarily intentional.
5)

224.

Aggravating circumstances

There are no aggravating circumstances here.
6)

Conclusion

225.

Electrabel has committed a serious infringement. This infringement wascommitted by a large undertaking, with experience in merger control proceedings
and with substantial legal resources. The analysis of the existence of control was
not a complex one. The Commission has nevertheless taken full account of theabsence of damage to competition. On the question of mitigating circumstances,
the Commission notes that Electrabel disclosed the situation voluntarily and has
answered the Commission's questions.

VI.

AMOUNT OF THE FINES

226.

When imposing penalties, the Commission takes into account the need to ensurethat fines have a sufficiently deterrent effect. In the case of an undertaking of thesize of Electrabel, the amount of the penalty must be significant in order to have adeterrent effect.

227.

In order to impose a penalty for the infringement and prevent it from recurring,
therefore, and given the specific circumstances of the case at hand, theCommission considers it appropriate to impose a fine of € 20 000 000 under
Article 14(2)(b) of Regulation (EEC) No 4064/89,

39

HAS ADOPTED THIS DECISION:
Article 1
By putting into effect a concentration with a Community dimension in the period 23
December 2003 to 9 August 2007, before it was notified and before it was declaredcompatible with the common market, Electrabel SA has infringed Article 7(1) ofRegulation (EEC) No 4064/89.
Article 2
A fine of € 20 000 000 is hereby imposed on Electrabel for the infringement referred toin Article 1.
Article 3
The fine imposed in Article 2 shall be paid in euro within three months of the date of
notification of this Decision into the following Commission bank account with thefollowing bank:.
[...]*

After the expiry of that period, interest shall automatically be payable on the fine at therate charged by the European Central Bank on its principal refinancing operations on thefirst working day of the month in which this Decision is adopted, plus 3.5 percentage
points.
Article 3This Decision is addressed to:Electrabel SA
Boulevard du Régent/Regentlaan 8
B-1000 Brussels
This Decision shall be enforceable pursuant to Article 256 of the EC Treaty andArticle 110 of the EEA Agreement.

Done at Brussels, 10 June 2009
For the Commission(signed)Neelie Kroes
Member of the Commission
40