Deutsche Post Should Lose Bid to Block Belgian Post Aid, EU Court Advised
Stock Chart for Deutsche Post AG (DPW)
Deutsche Post AG should lose its bid to block 297.5 million euros ($391 million) in state aid to Belgium’s La Poste SA, an adviser to the European Union’s top court said.
A ruling in favor of Deutsche Post last year “should be canceled” and the challenge “be declared inadmissible,” Advocate General Niilo Jaeaeskinen of the EU’s Court of Justice said in a non-binding opinion today. The Luxembourg-based court follows such advice in a majority of cases.
Belgium appealed after Deutsche Post, the world’s biggest transporter of air and sea freight by volume, won a lower-court ruling to annul EU backing for the aid. The February 2009 ruling triggered an in-depth review by the European Commission, the 27 nation EU’s antitrust regulator, into all state aid received by Belgium’s state-controlled postal service.
The case is one of the hurdles La Poste has to clear before it can proceed with a planned initial public offering. CVC Capital Partners Ltd., which owns almost 50 percent of La Poste, in June hired JPMorgan Chase & Co. and Nomura Holdings Inc. to advise on a possible stock sale.
Deutsche Post sued the commission in November 2003 after the regulator approved the capital injection by the Belgian government. A ruling by the court usually follows within six months after an opinion.
Deutsche Post must study the reasoning of the advocate general before it can comment, Uwe Bensien, a spokesman for the company, said by telephone.
The case is C-148/09 P, Belgium v Deutsche Post and Others.
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