Wabco Holdings Inc. (WBC:US) won a 203.4 million euro ($272 million) windfall after a European Union court cut the antitrust penalty it paid for Ideal Standard’s involvement in a bathroom fittings cartel.
The EU General Court in Luxembourg also trimmed Sanitec Corp.’s fine to 50.6 million euros from 57.7 million euros. Wabco was liable for the original fine as part of an accord linked to its spinoff from American Standard Companies Inc. that predated the EU penalties.
The court said today that EU regulators had wrongly held Ideal Standard guilty of colluding on the Italian market for ceramics for longer than was the case. Wabco shares advanced (WBC:US) as much as 4.4 percent in New York trading after the ruling.
Wabco paid all of the 326.1 million-euros fine levied in September 2010 “and will keep the full amount of the reimbursement” awarded by the EU court today, the company said in an e-mailed statement. “We are pleased that the court has recognized our strong grounds for appeal and has decided to significantly reduce the fine,” Chief Executive Officer Jacques Esculier said in the statement.
The European Commission, the EU’s antitrust watchdog, listed 17 companies in its 2010 decision as having fixed prices for baths, sinks, tabs and other bathroom fittings for 12 years in six countries. The total fine levied was 622.2 million euros. Masco Corp. (MAS:US) was exempt from a fine, though it was included as a participant in the cartel.
While Villeroy & Boch AG’s fine of 71.5 million euros was upheld today, the court partly accepted the company’s challenge of the EU finding that it had participated in the cartel in some countries before 1994. Duravit AG also had parts of its appeal upheld today by the court, though the fine of 29.3 million euros remained unchanged.
Sanitec, based in Helsinki, said in a statement it had made a provisional payment of 57.69 million euros in September 2010. It now expects to be reimbursed the difference plus interest, it said. Sanitec is owned by EQT Partners AB.
The commission in November 2004 raided the offices of Grohe, American Standard and other bathroom-products makers in five European countries and in March 2007 sent official objections to a number of the companies, including Grohe and American Standard.
“Wabco has never manufactured or marketed any of the products that were the subject” of the EU probe, the company said today.
“In connection with its spin-off from American Standard Companies Inc. in 2007” Wabco said it “was obliged to indemnify American Standard Companies Inc., now known as Trane Inc., and certain of its former entities involved in the commission’s investigation and related fines.” Trane is owned by Ingersoll-Rand Plc. (IR:US)
Villeroy & Boch said in an e-mailed statement the ruling is “not comprehensible” and is based on a “highly questionable EU procedure.”
The price-fixing agreements took place at trade association meetings, with more than 200 meetings occurring between 1992 and 2004, the Brussels-based commission said. The 17 companies during those sessions coordinated the sales prices for the bathroom fittings in Germany, Austria, Italy, Belgium, France and the Netherlands.
While Masco, whose units include Hansgrohe and shower-fittings maker Hueppe, received immunity from a fine for being the first to provide information about the cartel, it sought to overturn the EU’s decision that it had participated in the cartel. The court today rejected its appeal.
“We are reviewing the judgment and considering an appeal,” the company said in an e-mailed statement.
Antoine Colombani, a spokesman for the commission in Brussels, said today’s ruling “confirms the substantial findings” of the regulator.
The cases are: T-412/10, T-411/10, T-408/10, T-396/10, T-386/10, T-380/10, T-379/10, T-381/10, T-378/10, T-376/10, T-375/10, T-373/10, T-374/10, T-382/10, T-402/10, T-368/10, T-364/10.
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