Bloomberg News

Deutsche Post State Aid Repayment Set at 298 Million Euros

May 29, 2012

Deutsche Post AG (DPW), Europe’s largest mail carrier, said the German government has demanded repayment of 298 million euros ($374 million) in subsidies that the European Commission said breached antitrust legislation.

The German postal operator filed an appeal against the January ruling with the European Court of Justice, the Bonn- based company said in an e-mailed statement. “The ruling is incomprehensible and has no basis in fact,” it said.

The commission had estimated the repayment at 500 million euros to 1 billion euros after an investigation into payments from the German government to cover pension costs at Deutsche Post that may have hampered rivals who paid 10 percent to 15 percent more in contributions.

The company “has effectively borne significantly lower social contributions than its private competitors for services which were open to competition,” such as parcel delivery and retail banking, the regulator said in January.

The EU probe broadened the scope of an investigation that started in 2007 into “all public measures, such as transfers of public money and tariff income” granted to Deutsche Post and predecessor Postdienst since 1989. The prior probe was prompted by complaints from Atlanta-based United Parcel Service Inc. (UPS:US), the world’s largest package-delivery company.

Deutsche Post will record the payment only on its balance sheet this year as it expects the ruling to be voided, the company said.

To contact the reporters on this story: Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net


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