COMMISSION DECISION (EU) 2022/459

of 10 September 2021

on the State aid SA.49668 (2019/C) (ex 2017/FC) and SA.53403 (2019/C) (ex 2017/FC) implemented by Denmark and Sweden for PostNord AB and Post Danmark A/S

(notified under document C(2021) 6568)

(Only the Danish and Swedish versions are authentic)

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first subparagraph of Article 108(2) thereof,

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1), point (a), thereof,

Having given notice to the parties concerned to submit their comments pursuant to those provisions (1) and having regard to their comments,

Whereas:

1. PROCEDURE

(1) On 27 November 2017, Brancheorganisation for den danske vejgodstransport (‘ITD’) submitted a complaint to the Commission on several measures that were granted or were planned to be granted by Denmark and Sweden to Post Danmark A/S (‘Post Danmark’). The Commission has assessed several of those measures in its Decision SA.47707 of 28 May 2018 (‘the 2018 Decision’) (2). In the 2018 Decision, the Commission announced that it would adopt a separate decision on the remaining measures, which are the subject of the present Decision: (a) a capital injection from PostNord Group AB (‘PostNord Group’) into Post Danmark; (b) a capital injection from Denmark into PostNord AB; and (c) a capital injection from Sweden into PostNord AB.

(2) By letters dated 20 December 2017, 12, 13 and 28 March 2018, 3, 6 and 26 April, 15, 26, 28 and 30 May, 1 and 13 June 2018, 9 October 2018, 10 December 2018, 6 and 13 March 2019 the Danish and Swedish authorities either jointly or individually provided the Commission with further information (3).

(3) By letter dated 14 June 2019, the Commission informed Denmark and Sweden that it had decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union (‘TFEU’) in respect of the aid (4) (‘the opening decision’). The Commission requested Denmark and Sweden to submit their comments and to provide all such information as may help to assess the remaining measures, and also invited all interested parties to submit their comments on the remaining measures.

(4) The Commission received the first comments from Sweden and Denmark on the opening decision by letters dated 12 and 16 July 2019 respectively.

(5) The Commission received comments from seven third parties, including ITD, on the opening decision by letters dated 17 September 2019.

(6) The Commission forwarded the comments from all third parties to Sweden and Denmark on 3 and 14 October 2019.

(7) The Swedish and Danish authorities provided their comments on the comments from third parties by joint letter and separate letters on 13 December 2019.

(8) In the course of the proceedings, the Commission received additional comments from Sweden and Denmark on 24 March 2020 and 19 May 2020 following requests for information of 14 February 2020 and 22 April 2020.

(9) The Commission received additional comments from ITD on 15 May 2020 and 5 February 2021. The latter was forwarded to Sweden and Denmark on 9 February 2021. Denmark and Sweden reacted by email on 7 April 2021.

2. DETAILED DESCRIPTION OF THE AID

2.1. Beneficiaries

2.1.1. Post Danmark and PostNord AB

(10) The provision of postal services as an integrated part of the Danish government dates back to 1711. The nationwide circulation of postal items was introduced in 1865. Until 1995, the postal services in Denmark were conducted under the responsibility of the Ministry of Public Works.

(11) By Act No 88 of 8 February 1995 (5), Denmark transferred all of the activities of the postal service to Post Danmark, which was established as an independent public enterprise. Pursuant to the Postal Services Act (6), Post Danmark had a legal monopoly on domestic and cross-border letters.

(12) The Danish Minister of Transport has established Post Danmark as a State-owned limited liability company under Act No 409 of 6 June 2002 (7). Pursuant to §4 of that act, the State could sell up to 25 % of Post Danmark’s shares. In 2005, Post Invest S.A. (administered by CVC Capital Partners) acquired 22 % of the shares in Post Danmark and 3 % of the shares were offered to the employees. In 2009, Post Invest S.A. sold its stake in the company back (8) to Denmark, right before the company merged (9) with the Swedish postal operator Posten AB (10). Following the merger, PostNord AB was created.

(13) The intention behind the merger was to establish a more robust undertaking and to meet increasing pressure on the undertaking’s core product, namely the distribution of letters. PostNord AB is co-owned by Denmark (40 %) and Sweden (60 %) while voting rights are shared 50-50, and is the 100 % owner of PostNord Group. The structure of the undertaking is shown in Figure 1. The whole undertaking including all its subsidiaries is referred to as ‘PostNord’. Figure 1 Corporate structure of PostNord

(14) Post Danmark is a wholly owned subsidiary of PostNord Group, and has been operating in full competition with other postal operators since the liberalisation of the Danish postal market in 2011, as a result of Directive 97/67/EC of the European Parliament and of the Council (11). Denmark has entrusted Post Danmark with the universal service obligation (‘USO’) under the Danish postal act (12), involving in particular the delivery and distribution of letters across the territory of Denmark. Post Danmark faces competition especially in the parcel market and the market for the distribution of newspapers and magazine mail.

2.1.2. The markets on which PostNord and Post Danmark operate

(15) PostNord is mainly active on the Swedish, Danish, Norwegian and Finnish markets for postal services, and provides courier, cargo and logistics solutions in the Nordic region and in the rest of Europe.

(16) Post Danmark is active on the Danish postal services markets and offers a variety of postal services (delivery of letters, parcels, express deliveries, courier services, electronic mailbox services, cargo services, operation of a network of post offices).

2.2. Background of the measures under assessment

2.2.1. Impact of digitisation on Post Danmark

(17) General digitisation trends and specific circumstances in Denmark (13) have led to a rapid decline in the number of letters handled by Post Danmark, for instance, letter volume has declined drastically since the early 2000s, at a higher rate than that of other comparable countries. In Denmark, the letter volume fell by more than 80 % in the period 2006 to 2019. The development in letter volumes handled by Post Danmark compared to other European postal service operators is illustrated in Figure 2. Figure 2 Development in mail volumes in European postal service operators Other lines represent Germany (-27 %), Austria (-29 %), Switzerland (-31 %), Belgium (-35 %), France (-43 %), United Kingdom (-50 %), Spain (-52 %), Italy (-63 %), Netherlands (-64 %), Sweden (-50 %), Finland (-47 %), Norway (-53 %, since 2008), Ireland (-48 %, since 2010), Portugal (-44 %). Source: The postal operators’ websites and annual reports

(18) The consequence of that accelerated digitisation has been a fall in revenues. In the period 2009 to 2019, Post Danmark’s revenue decreased by 55 %, in large part due to lower revenues from the letter market, and from 2012 onwards the company generated annual deficits, see Table 1: Table 1 Post Danmark’s revenue and Earnings Before Interest and Tax (‘EBIT’) in 2009 to 2019: MDKK 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Revenue 10 828 10 107 9 250 8 811 8 171 7 964 7 641 6 728 5 836 6 214 4 913 EBIT 81 348 305 - 207 - 204 - 301 - 289 -1 178 - 790 -1 063 - 221

(19) Post Danmark took measures to improve its financial situation and between 2009 and 2016, 8 000 FTE employees left the company. Those measures were however insufficient and Post Danmark could only avoid bankruptcy thanks to a capital injection from PostNord Group of DKK 1 billion on 23 February 2017 (addressed in the 2018 Decision (14)).

(20) In order to make Post Danmark economically viable again, the Board of Directors of PostNord AB developed a new production model. The production model is part of a broader transformation plan (15) that also includes the reorganisation of the administration (namely reductions in overhead costs, IT costs and real estate costs). The new production model aims to increase efficiency in mainly the following three ways: (a) the delivery of quick letters and other day-to-day mail items is to be based on the logistics delivery network (that is, delivered together with parcels) to save costs by avoiding parallel distribution networks; (b) postal items are to be distributed directly from a hub or postal service outlet without the need for separate facilities except letter sorting centres; (c) ordinary letters and magazine mail are to be delivered in a so-called flower model, replacing the current distribution method and entailing a significant reduction in the number of daily routes.

(21) That plan entails high costs, in particular related to the dismissal of more than 4 000 employees, including an estimated 1 500 out of 3 200 former civil servants.

2.2.2. October Agreement

(22) Against this background, Sweden and Denmark signed a bilateral agreement on 20 October 2017 (‘The October Agreement’) that describes several measures in favour of PostNord AB and Post Danmark. The October Agreement states: ‘In order to meet the challenges of digitalization in Denmark, the Company [(PostNord AB)] has developed a new production model with an estimated cost of approximately SEK 5,0 bn’ (16). PostNord AB estimated at the time that the external funding needed for the implementation of the transformation plan would be SEK 3 billion (approximately EUR 297 million) (17). According to the October Agreement, that amount is to be financed by a capital injection of SEK 400 million (approximately EUR 39,6 million) from Sweden and a capital injection of SEK 267 million (approximately EUR 26,4 million) from Denmark. Those two capital injections are to be made as a contribution of capital to PostNord AB (18). In addition, PostNord Group would make an internal contribution to Post Danmark of approximately SEK 2,3 billion (approximately EUR 228 million). Sweden and Denmark have paid out their respective capital injections, while PostNord Group has since injected capital for an amount of DKK 2,339 billion (approximately EUR 314,6 million (19)). The capital injection from PostNord Group is referred to in paragraph 4 of the October Agreement without explicitly mentioning an amount: ‘The Company has estimated the need for capital to be SEK 3,0 bn whereof the Swedish Shareholder agrees to invest SEK 400 m and the Danish Shareholder agrees to invest SEK 267 m to support the implementation of the new production model and the Company will provide the additional funding . These investments are to be made as a contribution of capital to the Company on market terms without issuing new shares.’ (emphasis added).

(23) In addition, the October Agreement states that the Danish State is to provide SEK 1,533 billion (approximately EUR 151,6 million) to Post Danmark to finance certain legacy costs. Denmark eventually notified this amount as USO compensation and it was approved as compatible aid in the 2018 Decision.

(24) The October Agreement stresses that the agreement between Denmark and Sweden is subject to ‘the consent of the Danish Government, the Danish Parliament, the Swedish Government, the Swedish Parliament and, as regards the State aid elements, approval from the European Commission’ (20).

2.2.3. The Agreement on the implementation of the USO compensation

(25) On 11 June 2018, PostNord AB and Denmark concluded an agreement on the principles for implementing the USO compensation (21). That agreement also contains a clause which obliged the Board of Directors of PostNord AB to transfer the PostNord Group capital injection to Post Danmark. The Board of Directors decided to do so on the same day.

2.3. Description of the measures under assessment

2.3.1. The measures under assessment

(26) The scope of this Decision concerns the three capital injections listed in recital (1) as described more in detail in Sections 2.3.2, 2.3.3 and 2.3.4.

2.3.2. Capital injection from PostNord Group into Post Danmark

2.3.2.1. Objective

(27) The objective of the capital injection from PostNord Group into Post Danmark, as declared by the Danish and Swedish authorities, is to support the implementation of the transformation plan by Post Danmark.

2.3.2.2. Amount and origin

(28) The capital injection from PostNord Group into Post Danmark amounts to DKK 2,339 billion.

2.3.2.3. Timing

(29) PostNord Group has paid out the capital injection into Post Danmark in three tranches. Firstly, on 4 April 2018, a tranche in the amount of DKK 150 million was paid. Secondly, on 18 June 2018, a tranche in the amount of DKK 1 450 million was paid. Finally, on 4 February 2019, a tranche in the amount of DKK 739 million was paid.

2.3.3. Capital injection from Denmark into PostNord AB

2.3.3.1. Objective

(30) The capital injection from Denmark into PostNord ABalso forms part of the October Agreement, but has a different objective. Denmark has explained that the objective of the capital injection from Denmark relates to the preservation of the investment grade rating of PostNord AB (22).

2.3.3.2. Amount and origin

(31) The capital injection from Denmark into PostNord AB amounts to SEK 267 million.

2.3.3.3. Timing

(32) Denmark paid out its capital injection into PostNord AB on 10 December 2018.

2.3.4. Capital injection from Sweden into PostNord AB

2.3.4.1. Objective

(33) Sweden, like Denmark, has also explained that the objective of the Swedish capital injection is the preservation of the investment grade rating of PostNord AB (23).

2.3.4.2. Amount and origin

(34) The capital injection from Sweden into PostNord AB amounts to SEK 400 million.

2.3.4.3. Timing

(35) Sweden paid out its capital injection into PostNord AB on 10 December 2018.

2.4. ITD complaint

(36) On 27 November 2017, the Commission received a complaint from ITD, an association with over 810 members active in the road transport and logistics sector in Denmark (see recital (1)). The Commission has assessed part of the complaint in the 2018 Decision. The complaint concerned the following measures: (a) a State guarantee granted in 2002 by Denmark to former civil servants for liabilities regarding redundancy payments in case of Post Danmark’s bankruptcy; (b) a VAT exemption related to e-commerce companies, in effect from 1990 to 1 January 2017; (c) the alleged incorrect separation of Post Danmark’s accounts and the alleged cross-subsidisation of commercial services by USO activities between 2006 and 2013; and (d) an internal transfer from PostNord Group to Post Danmark of DKK 1 billion on 23 February 2017; (e) USO compensation for the period 2017 to 2019; and (f) three capital injections referred to in the October Agreement (see recital (22) to (24)), which are the subject of this Decision.

2.5. The 2018 Decision

(37) On 28 May 2018, the Commission adopted the 2018 Decision in which it concluded that four measures raised in the ITD’s complaint constituted either no aid or existing aid and that the USO compensation of SEK 1,683 billion was compatible aid under the Services of General Economic Interest (SGEI) Framework (24) (an amount of only SEK 1,533 billion was finally paid).

(38) In the 2018 Decision, the Commission announced that the three capital injections complained about by ITD, would be assessed separately.

(39) On 20 September 2018, ITD and Danske Fragtmænd A/S, a company active on the Danish market for road transport of goods and parcel distribution services, appealed the 2018 Decision on procedural grounds. In support of their action, the applicants raised a single plea in law, alleging that the Commission failed to initiate the formal investigation procedure provided for in Article 108(2) TFEU, despite the serious difficulties raised by the assessment of the compensation at issue and of the other measures challenged in ITD’s complaint. The General Court registered the case under T-561/18 (25).

(40) On 5 May 2021, the General Court upheld the Commission’s conclusion that the USO compensation for 2017 to 2019 constitutes compatible aid under the SGEI Framework. In addition, it upheld the Commission’s conclusion on two out of the other four measures raised in the complaint, namely the State guarantee granted in 2002 by Denmark to former civil servants for liabilities regarding redundancy payments in case of Post Danmark’s bankruptcy and the way in which Post Danmark allocated its costs in the period 2006 to 2013. The General Court partially annulled the 2018 Decision, however, considering that the Commission should have initiated the formal investigation procedure as regards the capital injection of DKK 1 billion granted by PostNord Group to Post Danmark on 23 February 2017 and the VAT exemption for e-commerce companies when they purchased transport services from Post Danmark.

2.6. Grounds for initiating the formal investigation procedure

(41) On 14 June 2019, the Commission opened the formal investigation procedure regarding the measures described in Section 2.3 due to its doubts as to the market conformity of the three capital injections.

2.6.1. Capital injection from PostNord Group into Post Danmark

(42) In the opening decision, the Commission considered that the discounted cash flow (‘DCF’) model presented by the Danish and Swedish authorities was in line, from a methodological viewpoint, with acceptable practice for assessing the market conformity of an investment. The net present value (‘NPV’) of the future cash flows of a company (adjusted for debt) is a commonly used way to evaluate equity investment decisions. The model considered two cash flows, namely one resulting from the bankruptcy of Post Danmark (negative cash flows), which would be avoided, and the other from Post Danmark’s future operational profits (positive cash flows).

(43) As regards the calculation of Post Danmark’s future operational profits, the Commission however had doubts regarding the growth rates assumed for the letter and logistics market, in view of the fact that Post Danmark’s net sales decreased by nearly 10 % in 2017. As regards the calculation of the adverse effects of Post Danmark’s bankruptcy, the Commission considered that Denmark and Sweden had insufficiently substantiated the quantification of the adverse effects.

(44) The Commission also noted that the DCF model was relatively sensitive to the assumptions applied. The investment would in particular no longer pass the Market Economy Operator Principle (‘MEOP’) test if, for example, the Weighted Average Capital Cost (‘WACC’) was […] % and annual total projected sales growth was […] %. Against this background, the Commission considered that more certainty was necessary on the parameters to be used in the calculations.

(45) Considering the information set out in recitals (42) to (44), the Commission expressed certain doubts as to the market conformity of PostNord Group’s capital injection (26).

2.6.2. Capital injection from Denmark into PostNord AB

(46) The Commission noted that the Danish authorities considered neither the probability of PostNord AB losing its shadow investment grade in the absence of the capital injections by Denmark and Sweden, nor the probability of PostNord AB losing such shadow investment grade anyway, even if the capital injections from Denmark and Sweden were granted.

(47) Furthermore, the Commission noted that the Danish authorities considered neither the maturity of the loans to be re-financed nor the period during which it was assumed that PostNord AB’s shadow investment grade would be maintained because of the capital injections from Denmark and Sweden. Both elements would however have to be considered to properly estimate the savings in financing costs attributable to the capital injections, assuming that such savings would exist.

(48) In light of recitals (46) and (47), the Commission expressed its doubts regarding the market conformity of the Danish authorities’ capital injection (27).

2.6.3. Capital injection from Sweden into PostNord AB

(49) The Commission considered that the argumentation presented in recitals (46) to (48) applied equally to the assessment presented by the Swedish authorities about the Swedish capital injection into PostNord AB. Furthermore, the Commission considered that the Swedish authorities had not demonstrated that the annual savings on borrowing costs of SEK […] estimated by the Swedish authorities as attributable to the capital injections from Denmark and Sweden would provide the Swedish authorities a return in conformity with the market from their capital injection.

(50) The Commission noted that the Swedish authorities had also acknowledged that there were several uncertainties included in the credit rating analysis. Those uncertainties are in particular the fact that PostNord AB does not have a real public credit rating and the underlying assumption that all current debt is re-financed and that PostNord ABwill be able to acquire SEK […] additionally in debt from the market. Such unquantified uncertainties seemed difficult to reconcile with a proper private investor approach.

(51) In light of recitals (49) and (50), the Commission expressed its doubts regarding the market conformity of the Swedish authorities’ capital injection (28).

3. COMMENTS FROM INTERESTED PARTIES

(52) On 17 September 2019, the Commission received comments from seven interested parties: ITD, Dansk Distribution A/S, Dansk Scanning A/S, Danske Fragtmænd A/S, Jørgen Jensen Distribution A/S (‘JJD’), UPS Europe SPRL/BVBA and one interested party that requested to remain anonymous. All interested parties have submitted their comments separately.

3.1. ITD (the complainant)

(53) ITD has its head offices in Padborg (Denmark) and has offices in Copenhagen and Brussels. ITD is a Danish trade association and its more than 810 members include Danish professional companies active on the national and/or international markets for road transport of goods and logistics services (29). The objectives it pursues include ensuring a sound political and legal framework for the competitiveness of the Danish road transport and logistics companies and maintaining a high level of professionalism in the road transport sector by providing guidance, tools and services to road haulage companies. ITD claims that approximately half of its members transport general cargo and parcels and are therefore direct competitors of Post Danmark. The other half are potential future competitors in various market segments.

3.1.1. The three capital injections constitute one single measure

(54) ITD takes the view that the three capital injections (see Section 2.3) constitute one single measure and not, as stated by the Commission in its opening decision in recital (69), three separate measures.

(55) According to ITD, the judgment Greece and Others v Commission (30) demonstrates that in order to determine whether aid in the form of different payments constitute several measures or one single measure, one should look at ‘their chronology, their purpose and the circumstances of the undertaking’ (31). In ITD’s view, applying those criteria to the present case can only lead to the conclusion that the three capital injections constitute one single measure: (a) Chronology – ITD argues that all three capital injections were granted on 20 October 2017 when the October Agreement was signed by Denmark and Sweden (see Section 3.1.2); (b) Purpose – ITD argues that all three capital injections have the same purpose, namely to implement the transformation plan of Post Danmark and that the capital injections from Denmark and Sweden do not have the purpose to preserve the investment grade rating of PostNord, which is according to ITD merely a side effect of the capital injection. In this regard, ITD explains that the wording used in the October Agreement shows that also the capital injections from Denmark and Sweden aim at supporting the implementation of the transformation plan of Post Danmark and that the opening decision would support that view in recitals (59) to (61), (66) and (67); ITD also argues that it follows from the ‘obvious funding gap’ (namely the October Agreement estimates the costs of the transformation plan of which the new production model forms part at SEK 5 billion (see recital (22)), but the PostNord injection is ‘only’ DKK 2,339 billion) that the capital injections from Denmark and Sweden are needed, even if they would not be sufficient for carrying out the new production model. (c) Circumstances of the undertaking – ITD claims that the circumstances that Post Danmark found itself in at the moment of the three capital injections were the same.

(56) ITD argues that the Commission wrongly used a different set of criteria than the criteria recognised in Greece and others v Commission, namely that the capital injections: (a) are injected by different type of investors (Denmark, Sweden and PostNord (32)) that find themselves in different financial situations and have different financing costs that require different rates of return (see recital (69) to (74) of the opening decision); (b) do not have the same purpose; (c) are not granted to the same beneficiaries; and (d) require further implementing measures.

(57) With reference to recital (71) of the opening decision, ITD rejects the Commission’s argument that the BP Chemicals case is not relevant for the case at hand because in BP Chemicals the same investor injected capital in several instances. ITD considers that BP Chemicals is relevant for the present case for two reasons. Firstly, ITD argues that, BP Chemicals is another case evidencing that the Commission should have looked at the chronology, purpose and circumstances (see recital (55)). In addition, ITD argues that there is no statement in the BP Chemicals judgment (or any other judgment) to support the view that it matters whether one or several investors inject capital. In this regard, ITD notes that the costs of different investments will naturally vary (irrespective of whether they are made by one or several investors).

(58) ITD is also of the opinion that the Commission should have focussed on the investments and the target undertaking rather than the investor. In this regard, with reference to the wording in the October Agreement, ITD considers that the capital injections all had the same beneficiary, namely Post Danmark, contrary to what the Commission has argued. In this respect, in its comments of 17 September 2019, ITD has stated the following in relation to the October Agreement: ‘It appears from point 1 of the October 2017 Agreement that “a new production model with an estimated costs of approximately SEK 5,0 bn” has been developed and that “in the implementation of the new production model, the Company [PostNord] will transfer [that] capital to Post Danmark”. It appears from point 4 that “the need for capital [is estimated] to be SEK 3,0 bn whereof the Swedish shareholder agree to invest SEK 400 m and the Danish shareholder agree to invest SEK 267 m to support the implementation of [Post Danmark’s] new production model”’ (emphasis added by ITD (33)).

(59) As regards the requirement for further implementing measures, which would affect the moment of granting of the different capital injections, ITD explains that it follows from the case law that in order for implementing measures to be present, either the requirement that capital injections may only be granted following those implementing measures should have been laid down in a prior existing agreement or prior existing legislative act (34) or it should be impossible to grant the capital injections without taking those implementing measures (35). According to ITD, both of those conditions have not been fulfilled (36).

(60) Moreover, ITD points at the payment of the first instalment of the PostNord capital injection on 4 April 2018 for which apparently no implementing measures were required and that took place before the date on which the Commission considers the PostNord capital injection to have been granted. ITD also refers to the capital injection of DKK 1 billion, which was subject of the 2018 Decision, which could take place without any implementing measure.

(61) In addition, ITD considers that if the Commission would deviate from its line of reasoning in the opening decision (see recitals (69) to (76) of the opening decision) that the capital injections are three separate measures (and therefore would conclude that there is only one measure), a new opening decision is required.

3.1.2. The three capital injections were granted on the same date

(62) ITD takes the view that even if the Commission maintains that the three capital injections are three separate measures, they are still granted on the same date, namely on 20 October 2017, with the conclusion of the October Agreement.

(63) Alternatively, if the Commission considers that the capital injections were conditional upon the approval of the USO compensation, the three capital injections should be considered granted on 28 May 2018 when the Commission approved the USO compensation.

(64) In this regard, ITD firstly explains that the October Agreement is binding upon both Denmark and Sweden (37), similar to the Intergovernmental Agreement concluded between Denmark and Sweden on the establishment of a consortium that deals with the construction, management and operations of the so-called Øresund Fixed Link (38).

(65) Secondly, ITD explains that no implementing measures are required for the October Agreement to become effective. The implementing measures referred to by the Commission in the context of the capital injection from PostNord to Post Danmark and the capital injection from Denmark to PostNord were not required according to ITD, either under the October Agreement, or under any other legislative act (39), nor was it impossible to grant the capital injections without implementing measures (40). Therefore, ITD considers that the granting date of 11 June 2018 for both the capital injection from PostNord to Post Danmark and from Denmark to PostNord is incorrect.

(66) ITD also refers to the publication on 15 January 2021 of a report prepared by the Danish State auditor (‘Rigsrevisionen’). That report presents the conclusions of the Rigsrevisionen of the adequacy of the supervision of Post Danmark’s accounting practices. A graph included in that report, as well as the text of the report, shows, according to ITD, that all three capital injections constitute one single measure and were granted on the same date, namely 20 October 2017, the day of the October Agreement.

3.1.3. The capital injections constitute aid

3.1.3.1. State resources, imputability, selectivity, distortion of competition and affection of trade

(67) As regards the aid assessment carried out by the Commission in the opening decision, ITD welcomes that the Commission considered that the three capital injections involve state resources and are imputable to Denmark, Sweden or both, are selective and distort competition and affect trade between Member States.

3.1.3.2. Advantage of the capital injection from PostNord into Post Danmark

(68) As regards the DCF analysis prepared by PostNord establishing that the gains for PostNord as a result of the capital injection from PostNord to Post Danmark exceed the losses of liquidating Post Danmark, ITD claims that that analysis is not reliable due to the following reasons: (a) the DCF analysis has been conducted by PostNord itself and not by an independent expert; (b) the cost of capital in the DCF analysis would be undervalued, since it includes only one capital injection (that is, the capital injection stemming from PostNord to Post Danmark), while all capital injections are in ITD’s view linked and should thus be considered as a single intervention to be taken into account in the DCF analysis; (c) the DCF analysis would include ineligible costs, since it factors in: (1) Post Danmark’s real estate mortgage debt and loans that Post Danmark would not be able to repay in case of liquidation; while, according to Danish law, costs related only to the value of shares of PostNord, considering the liquidation value of Post Danmark assets, should have been taken into account; (2) costs linked to the responsibilities of the public authorities, such as the cost of the guarantor (namely PostNord) to pay Post Danmark’s mortgage debt and other loans, that is, a form of State aid, which no private investor would undertake to pay, in view of the catastrophic financial situation of Post Danmark over the last number of years; (3) the indirect bankruptcy costs, namely the alleged higher borrowing costs of PostNord and PostNord’s loss ‘of not being able to offer comprehensive Nordic logistics solutions’ (41) as well as the ‘loss of synergies and scale to its Nordic operations’ (42), which no private investor would be prepared to pay, and, therefore, they should be excluded as they involve the granting of State aid; (d) according to ITD, the DCF analysis includes ineligible cash flows, such as the USO compensation, which is State aid and therefore should also be excluded.

(69) In addition, ITD claims that: (a) even if it were to be accepted that Post Danmark’s shareholders would have to bear the direct and indirect costs of bankruptcy, the DCF should not include the full amount of avoided costs of Post Danmark’s bankruptcy, since its bankruptcy would not necessarily be avoided through the grant of PostNord’s capital injection; (b) the revenues in the DCF are too high and do not account for the risk that the USO license might not be extended beyond 2019. ITD suggested that such a risk could be factored in by using a higher discount rate (namely WACC) for the years 2020 onward; (c) in view of the 10 % decrease in Post Denmark’s net sales in 2017, the estimates in the DCF of the growth rates in the letter and logistics market are too optimistic and thus questionable; (d) the WACC in the DCF is too low, since it takes into account PostNord’s peers, rather than Post Danmark’s peers. Moreover, the WACC does not consider the risk for bankruptcy as a consequence of the transformation plan and the WACC does not factor in the arbitrary assumptions regarding future market conditions; (e) a potential loss of investment grade would be due to the fact that PostNord’s capital injection would be financially unsound which, in turn, would prove that PostNord’s capital injection does not meet the private market investor test.

3.1.3.3. Advantage of the capital injections from Denmark and Sweden into PostNord

(70) ITD considers that there are more elements casting doubts on the capital injections from Denmark and Sweden than those mentioned by the Commission in the opening decision: (a) based on the October Agreement, it is clear that the capital injections from Denmark and Sweden into PostNord are to be passed on to Post Danmark and that no private market investor would inject capital into Post Danmark; (b) all three capital injections are not in line with market terms because Denmark granted another DKK 112 million (approximately EUR 15 million) in December 2019 for the extension of the USO license of Post Danmark for 1 January 2020 to 30 June 2020, in order to enable Post Danmark A/S to survive; (c) the NPV calculation carried out for the Danish and Swedish capital injections in order to show their market conformity in the context of maintaining the credit rating of PostNord, does not indicate what the return is (if any); (d) no comparison has been made between the value of the capital injections and the counterfactual scenario where PostNord would be liquidated and, therefore, no private market investor would make those capital injections.

3.2. Dansk Distribution

(71) Dansk distribution A/S has its head offices in Karlslunde (Denmark) and ships parcels, pallets and general cargo. Dansk Distribution claims that it competes with Post Danmark in the parcel and more generally the distribution sector. It has an interest to submit comments because Dansk Distribution and Post Danmark participate in the same tenders for logistics contracts where Post Danmark would allegedly offer prices below the market price.

(72) Dansk Distribution has submitted the same comments as ITD.

3.3. Dansk Scanning

(73) Dansk Scanning A/S has its head office in Esbjerg (Denmark) and creates digital archives for its clients. It offers a range of digitalisation services. Dansk Scanning claims that it competes with Post Danmark in the digitalised postal sector and in particular in the market for scanning services.

(74) Dansk Scanning has submitted the same comments as ITD.

3.4. Danske Fragtmænd A/S

(75) Danske Fragtmænd A/S is based in Aarhus (Denmark) and is a subsidiary of Fragtmænd Holding A/S. It provides logistics services for corporate clients in Denmark. It receives orders and subsequently stores, picks, packs and distributes semi-manufactured and manufactured products, spare parts, convenience goods, consumer durables. It can deliver on a day-to-day basis and provides door-to-door delivery. In addition, Danske Fragtmænd is active on the market for warehousing and information technology services.

(76) Danske Fragtmænd A/S has submitted the same comments as ITD.

3.5. Jørgen Jensen Distribution A/S

(77) JJD has its head office in Ikast (Denmark) and provides cargo transport services. It provides a range of transport services, including the distribution of parcels, cargo, palletised cargo, long-haul deliveries, encompassing temperature-sensitive goods (like food) and non-temperature-sensitive goods. In addition, JJD is active on the markets for haulage services with pickup and delivery on very short notice as well as courier services. JJD claims to compete with Post Danmark in the transport and distribution sector. It considers that the capital injections, which are subject of this Decision, directly affect its operations since they would give Post Danmark the capability to offer lower prices than the market price (15 % to 30 % lower). JJD explains that it has experienced this in the context of tenders and competitions based on customer invitations (43).

(78) JJD has submitted the same comments as ITD.

3.6. UPS

(79) UPS is a global provider of specialised postal and shipping services. After the United States of America, UPS’ biggest market is Europe where it serves 56 countries and territories. Since 1988, UPS is active on the Danish market where it offers domestic, international postal, and logistics services, including express and standard delivery for parcels as well as a range of air, ocean and road freight transport services. UPS claims to compete directly with Post Danmark in the non-universal parcels and postal service and logistics sector.

(80) UPS’ comments overlap largely with those submitted by ITD and other third parties, but there are specific comments related to the MEOP assessment.

3.6.1. Capital injection from PostNord into Post Danmark

(81) Firstly, UPS claims that the assumed growth rate in the DCF calculations may be validated by comparing it properly to that of the postal and logistics sector as reported in a number of research papers and other sources (44).

(82) UPS also suggests that PostNord’s ability to accurately forecast the expected results on specific targets such as the revenue growth rate and EBIT of the company should be questioned. The latter could be assessed by ‘back-testing’ the historical plan to actual results for those targets.

(83) In addition, UPS claims that additional borrowing costs, as a result of a downgrading, should be included in the DCF, not only in the bankruptcy scenario in absence of PostNord’s capital injection, but also in the scenario where PostNord’s capital injection takes place. UPS considers that this would be in line with the Danish authorities statement that PostNord’s credit rating could also deteriorate as a consequence of the capital injection in Post Danmark.

3.6.2. Capital injections from Denmark and Sweden into PostNord

(84) UPS claims that in order to determine whether Denmark and Sweden’s capital injections would be made by a private investor, a more detailed assessment of the alleged additional borrowing costs resulting from PostNord’s credit downgrade should have been conducted. That assessment should then have taken into account expected future funding needs in the form of a forecasted cash flow analysis and an overview of existing debt.

3.7. Anonymous

(85) The anonymous third party claims to compete with Post Danmark in the parcel and freight distribution sector.

(86) The anonymous third party has submitted the same comments as ITD.

4. COMMENTS FROM DENMARK AND SWEDEN

4.1. Joint comments from Denmark and Sweden on the opening decision

(87) In their joint comments, Sweden and Denmark indicate that they, as separate and independent owners of PostNord AB, made their own assessments of the economic rationale of their respective capital injections. For this reason, their comments on the capital injections from Denmark and Sweden are presented separately in Sections 4.2 and 4.3.

(88) Sweden and Denmark, in an annex to their joint comments, have submitted the comments from PostNord AB on the opening decision. According to PostNord AB ‘the Danish and Swedish governments have requested PostNord AB to comment on the parts of the opening decision and the third-party submissions concerning the intragroup transfers.’ As Sweden and Denmark have submitted PostNord AB’s comments, the Commission treats those comments as comments from both Denmark and Sweden.

4.1.1. The capital injections constitute three separate measures

(89) Firstly, Sweden and Denmark note that not only would the three capital injections be separate measures, but also the USO compensation for Post Danmark over 2017 to 2019 would be a distinct measure. They claim that this follows from the October Agreement whereby Denmark’s payment of the USO compensation was a condition for the Danish capital injection of SEK 267 million and the Swedish capital injection of SEK 400 million. Similarly, the USO compensation was indispensable for PostNord Group’s assessment that its capital injection would be on market terms. Making a capital injection (in line with market conditions) subject to the payment of compatible State aid in favour of the same undertaking is, according to Denmark and Sweden, widely accepted in the Commission’s case practice (45).

(90) Secondly, Denmark and Sweden agree with the Commission that the three capital injections constitute three separate measures. In this regard, they submit that the Commission’ considerations (namely the fact that the measures are granted by different investors with different financing costs, different requirements of return and decisional process, that the measures have different beneficiaries and different purposes) would be appropriate and supported by Greece v Commission (46). In that case, the General Court ruled that the Commission should have relied on all relevant elements of fact and law and not only on their context and the chronological succession of measures.

(91) Moreover, Denmark and Sweden stress that Sweden had no obligations flowing from Directive 97/67/EC on the Danish territory and thus would have had no other incentives than to make economically rationale investment decisions relating to PostNord Group’s financing of the transformation plan of Post Danmark. It follows that Sweden’s interest in Post Danmark is purely commercial.

(92) In addition, Denmark and Sweden explain that the case law recognises that several public bodies of the same Member State should be viewed as individual market economic operators (47). For this reason, they consider it indisputable that two different States should be viewed as two separate and individual market operators.

(93) In the view of Denmark and Sweden, not only are they distinct investors, but they and PostNord Group are also different investors. This would follow notably from the profitability (or loss-mitigation) analysis made by PostNord Group prior to its investment in Post Danmark, which is different from the analysis of Denmark and Sweden.

(94) As regards the capital injections having different beneficiaries, Denmark and Sweden consider that the references of the interested parties to the October Agreement, which allegedly identifies Post Danmark as the only beneficiary are not substantiated since the October Agreement was not intended to identify the real beneficiaries for State aid purposes. Rather, the October Agreement was an agreement in principle and this is clear from the wording of it. Denmark and Sweden have explained that their respective capital injections do not flow to Post Danmark and therefore would primarily benefit PostNord AB.

(95) Denmark and Sweden explain that any possible indirect benefit that Post Danmark may obtain because of their capital injections is too indirect to constitute an advantage in the sense of Article 107(1) TFEU. Moreover, other subsidiaries of the PostNord Group would receive a similar indirect advantage.

(96) As regards the measures having different purposes, Denmark and Sweden firstly explain that PostNord Group made the capital injection to Post Danmark with the aim of facilitating implementation of the transformation plan and increasing shareholder value (or reducing potential losses). Secondly, with their respective capital injections, Denmark and Sweden aimed at reducing the risk for the entire PostNord Group being regarded as not having investment grade quality and thereby preserve or increase the shareholder value.

4.1.2. The three capital injections were granted on different dates

(97) Denmark and Sweden consider it important to clarify their national decision-making procedures applicable to their respective capital injections and to correct the opening decision as regards when their respective capital injections were actually granted.

(98) In Denmark, all costs or expenditures that are not contained in the State budget as described in the annual Finance Act require a separate legal basis to be legally valid. The Parliament’s Finance committee can provide such a legal basis in the form of a Ministerial Decree (Akstykke) following a request made by the competent Ministry (in casu the Ministry of Transport, Building and Housing). Once adopted, the State reserves the funds for the objective described in the Ministerial Decree and the Ministry may subsequently dispose the funds through its treasury account, subject to the conditions of the Ministerial Decree. The adoption of the Ministerial Decree does not result in an obligation for the Ministry to dispose of the funds; it only establishes the legal basis for doing so. If the Ministry does not use the funds (for example, because a transaction cannot be finalised, certain projects are delayed or cancelled) the funds are returned to the Treasury. The Ministerial Decree for the Danish capital injection is the Ministerial Decree of 17 May 2018.

(99) In Sweden, the government needs a mandate from the Parliament to make changes to its company portfolio, including capital injections. Such a mandate from the Parliament enables the government to act; however, as a rule, it does not oblige the government to act upon at a certain time or in a certain way. There can be a significant time between the Parliament’s approval enabling the government to act and the moment when the government actually acts, if it acts at all. At the end of 2019, the Swedish government had several mandates to act, which it has not decided to act upon partly or in full (48). The Swedish capital injection for PostNord AB requires a government decision and thus a mandate from the Parliament.

(100) In light of recitals (97) to (99), Denmark and Sweden make a distinction between the date on which the investment decisions were made (in other words, any market conformity assessment should have been done before this date), the date on which the capital injections were granted and the date on which they were made available or paid out to the beneficiary. Those three moments in time are presented in the Figure 3 submitted by Denmark and Sweden: Figure 3 Timeline of the granting of the three capital injections:

(101) Denmark and Sweden explain that it follows from Figure 3 that: (a) the Danish owner’s investment decision of 17 May 2018 referred to is the Ministerial Decree referred to in recital (98); (b) the Swedish owner’s investment decision of 29 November 2018 (49) was taken following the decision of the Parliament of 12 December 2017 (50) which enabled the government to do so; (c) PostNord’s investment decision of 11 June 2018 was taken following the conclusion of the implementing agreement (see recital (25)) and the subsequent decision of the Board of Directors on the same day that the capital injection would be economically rational; (d) Denmark granted its capital injection only on 10 December 2018 when it was paid out. Before that date, Denmark considers that there was no legal entitlement for PostNord AB to receive the capital. Denmark considers that the Ministerial Decree of 17 May 2018 is not an obligation for Denmark to grant the aid (see recital (98)); (e) Sweden granted its capital injection on 29 November 2018, the same date as when the investment decision was taken; (f) PostNord granted its capital injection on 11 June 2018, the same date as when the investment decision was taken. This is in line with the Commission’s conclusion in recital (82) of the opening decision; (g) Denmark paid its capital injection on 10 December 2018, the same date as the granting date; (h) Sweden paid its capital injection on 10 December 2018; (i) PostNord Group paid its capital injection (minus DKK 150 million already paid on 4 April 2018) on 18 June 2018, the same date as on which the USO compensation, approved in case SA.47707, was also paid.

4.1.3. The capital injection from PostNord Group into Post Danmark does not involve State aid

4.1.3.1. Joint comments by Denmark and Sweden on imputability, State resources and distortion of competition

(102) The Danish and Swedish authorities submit that the capital injection from PostNord Group to Post Danmark merely constituted a transfer within the same undertaking (that is, the PostNord Group) and would not change the conditions of competition on the market (51), since Post Danmark was already present and operated on the market.

(103) In this regard, Denmark and Sweden explain that it follows from the Court’s judgment in ENEA that ‘the resources of public undertakings may be regarded as State resources where the State is capable, by exercising its dominant influence over such undertakings, of directing the use of their resources in order to finance advantages to the benefit of other undertakings’ (emphasis added by the Danish and Swedish authorities) (52).

(104) However, in the present case the Danish and Swedish authorities consider that neither Denmark nor Sweden was capable of directing the use of PostNord Group’s resources into Post Danmark, but more importantly a transfer of funds between the different entities in PostNord (such as the Group capital injection) would not amount to an advantage ‘to the benefit of other undertakings’ (53), but would merely be a transfer within the same undertaking (PostNord).

(105) In addition, the Danish and Swedish authorities explain, by again referring to ENEA (54), that the conduct of PostNord AB was not ‘dictated by instructions from public authorities’ and thus was not imputable to Denmark or Sweden.

(106) In this context, Denmark and Sweden also submit that it follows from Union case law in Stardust Marine that where decisions are taken by public undertakings, the mere fact that a public undertaking is under State control is not sufficient for measures taken by that undertaking to be imputable to the State. In fact, it must be demonstrated that the public authorities can be regarded as having been involved in the adoption of the measure, and this imputability to the State may be inferred from a set of indicators (55).

(107) The Danish and Swedish authorities explain that the transfer of DKK 150 million made on 4 April 2018 was made in order to ensure that Post Danmark was able to continue operating while awaiting the Commission’s expected approval of the USO compensation and the PostNord Group’s subsequent execution of the transformation plan, including the PostNord Group capital injection. Furthermore, there is no evidence that Denmark and Sweden were involved, in one way or another, in the decision to make the transfer of DKK 150 million.

(108) As regards the transfers made in June 2018 and February 2019, these contributions were part of PostNord AB’s decision of 11 June 2018 to proceed with the transformation plan (the date of the implementing agreement, see recital (25)). Moreover, regarding those two transfers, Denmark and Sweden submit that there is no evidence that either were involved in PostNord AB’s decision to proceed with the transformation plan (including the execution of the internal transfers of 18 June 2018 and 4 February 2019) other than in their capacity as shareholders of PostNord AB. Therefore, Denmark and Sweden consider that the Commission is wrong when it stated in recital (87) of the opening decision that the internal capital transfer is imputable to Denmark and Sweden, because it was part of the October Agreement. In this regard, Denmark and Sweden submit that the October Agreement only engages the two owners (Denmark and Sweden) and not PostNord Group.

(109) In addition, Denmark and Sweden submit that the mentioning, in paragraphs 1 and 4 of the October Agreement, of PostNord AB’s intention to implement the new production model and the linked capital injection from PostNord Group to Post Danmark is simply setting out the factual context of the October Agreement. It does not mean that PostNord AB’s decision to execute the transformation plan was imputable to Denmark and Sweden. This would be supported by the fact that: (a) at the initiative of PostNord AB, the transformation plan was already drawn up in autumn 2016; (b) that an internal capital transfer to Post Danmark was already made in February 2017; and (c) that the underlying analyses and assessments of Post Danmark’s situation and business plan were carried out by PostNord AB and not by Denmark and Sweden.

(110) According to Denmark and Sweden, the fact that Denmark’s provision of USO compensation was conditional on the implementation of the transformation plan (paragraph 9 of the October Agreement) only further underlines that the decision to implement that transformation plan rested with PostNord AB, since the condition would have been redundant if PostNord AB were already obligated to do so.

4.1.3.2. Joint comments by Denmark and Sweden on the non-existence of an advantage

(111) Denmark and Sweden argue that PostNord Group implemented its capital injection into Post Danmark in compliance with the MEOP. PostNord’s decision to make the internal capital transfers was based on methods which are in line with the market practice such as the DCF analysis, the Capital Asset Pricing Model and WACC.

(112) In particular, both Denmark and Sweden argue that Post Danmark’s growth rates for the letter market ([…] % annually), logistics market ([…] %) and overall (combined) growth (that is, expecting to reach […] % in 2026 and […] % after 2026) assumed in the DCF model were conservative. This is based on expectations that the logistics business will grow at a minimum rate of the underlying GDP growth, and that the decline in the letter business is expected to slow down by 2022 and stabilise in 2026. The projected growth rates were based on their trends over the past few years and took into account the projected inflation and population growth. The assumed slow-down in the decline of the letter services by 2022 was based on the fact that large parts of the Danish mail volumes were already digitalised (approx. 80 % of the volumes compared to 2001), and an assumption that the remaining part of the mail volumes would decrease at a much slower rate than the first, very large part (56).

(113) In addition, Denmark and Sweden argue that in a scenario where Post Danmark would go bankrupt, the market would doubt PostNord Group’s ability and willingness to support the remaining subsidiaries. In such a scenario, PostNord AB’s shadow credit rating would be significantly downgraded from the equivalent of a weak investment grade in the […] area to a speculative grade in the […] area. This would correspond to a spread between a […] bond and a […] bond of […] basis points (BPS), or the equivalent of […] % in yield. In that respect, Denmark and Sweden regard an assumption of a […] % increase in borrowing costs in a bankruptcy scenario as conservative. At the same time, the increased borrowing costs were calculated based on SEK […] in gross debt, which is considered the average interest-bearing liabilities balance needed between 2018 to 2026 to finance the PostNord Group in a scenario of a Post Danmark bankruptcy.

(114) Denmark and Sweden claim that if Post Danmark were to go bankrupt, PostNord would lose the competitive advantage of a complete Nordic network along with the combined synergies in the current production model. This would result in a revenue loss of […] % of PostNord’s own Nordic operations until 2026 (index with inflation and parcel growth), amounting to SEK […] million, while the corresponding Earnings Before Interest, Taxes, Depreciation and Amortisation (‘EBITDA’) impact would be […] %.

(115) Denmark and Sweden have submitted two detailed quantitative analyses to demonstrate the market conformity of the PostNord Group capital injection. Those analyses elaborate on calculations that the PostNord Group made prior to the investment. Both analyses are DCF models based on forecasts of costs and revenues discounted to the time of the investment, in order to determine the overall profitability of that investment. The main difference between the two analyses is the type of profit that they consider.

(116) The first analysis (presented in Table 2) calculates firstly the enterprise value in order to calculate the equity value. It consists of a DCF model regarding free cash flows accruing at the level of Post Danmark as a whole, namely the profits available for distribution to both debt and shareholders (free cash flows to the firm) discounted by the WACC of Post Danmark. In addition to those profits, the first analysis includes the potential losses that PostNord Group would incur in the counterfactual scenario where Post Danmark goes bankrupt. Those losses include, amongst other things, higher interest costs due to potential concerns on PostNord Group’s ability to service its debt, the revenues due to synergies between Post Danmark and the other activities of PostNord Group and the revenues that PostNord Group receives from Post Danmark as a compensation for the group level costs (such as […] and […] costs). The equity value is calculated by subtracting the net debt from the enterprise value. Table 2 Post Danmark A/S – DCF Evaluation model for PostNord Group’s capital injection – Enterprise/Firm value (amounts in million DKK) 2018 2019 2020 2021 2022 2023 2024 2025 2026 Assumptions for Terminal Enterprise/Firm value EBITDA […] […] […] […] […] […] […] […] […] […] Capex […] […] […] […] […] […] […] […] […] […] Change in net working capital […] […] […] […] […] […] […] […] […] […] USO equity capital injection 1 161 Net increase of provisions […] […] […] […] […] […] […] […] […] […] Tax on EBIT […] […] […] […] […] […] […] […] […] […] FCFF (incl. USO) (Free Cash Flow to Firm) […] […] […] […] […] […] […] […] […] […] WACC […] % Terminal growth rate of FCFF […] % Terminal Enterprise/Firm value […] Present Value (PV) of FCFF (A) […] PV of Terminal Enterprise/Firm value (B) […] Enterprise/Firm value (C)=(A)+(B) […] Net debt (D) […] Equity value (E)=(C)-(D) […] PV of Effects of bankruptcy (F) […] PostNord Group’s equity losses in Post Danmark’s liquidation scenario (G)=(F)-(E) […] PostNord Group’s capital injection (H) -2 339

(117) According to Denmark and Sweden, it follows from Table 2 that, in case of Post Danmark’s liquidation scenario, the losses that PostNord Group (being the sole shareholder) would suffer (namely equity losses, ‘G’) amounting to MDKK […] would be higher than the cost that PostNord Group actually suffered by injecting a capital (‘H’) of MDKK 2 339 in order to support Post Danmark.

(118) The second quantitative analysis (presented in Table 3) focusses directly on the equity value and consists of an application of the DCF method, which is based on the profits accruing only to the owner of Post Danmark, that is, PostNord Group. The DCF to equity method takes as a starting point the same free cash flows to firm used in the first analysis and then subtracts the interest rate costs on the debt, the reimbursement of loans and the cash inflows from new loans at the level of Post Danmark leading to the free cash flows to equity. This free cash flow is discounted by the cost of equity of the owner (PostNord Group). Similar to the first analysis, the calculation of equity value provided by Denmark takes into account the negative effects on PostNord Group in the counterfactual scenario. Table 3 Post Danmark A/S – DCF Evaluation model for PostNord Group’s capital injection – Equity value (amounts in million DKK) 2018 2019 2020 2021 2022 2023 2024 2025 2026 Assumptions for Terminal Equity value FCFF (incl. USO) (Free Cash Flow to Firm) […] […] […] […] […] […] […] […] […] […] USO equity capital injection -1 161 Free Cash Flow to Firm (excl. USO) […] […] […] […] […] […] […] […] […] […] Change in net debt […] […] […] […] […] […] […] […] […] Interest costs […] […] […] […] […] […] […] […] […] […] Difference in tax between FCF to Firm and FCF to Equity […] […] […] […] […] […] […] […] […] […] USO equity capital injection 1 161 FCFE (incl. USO) (Free Cash Flow to Equity) […] […] […] […] […] […] […] […] […] […] Cost of equity […] % Terminal growth rate of FCFE […] % Terminal Equity value […] PV of FCFE (A) […] PV of Terminal Equity value (B) […] Equity value (E)=(A)+(B) […] PV of Effects of bankruptcy (F) […] PostNord Group’s equity losses in Post Danmark’s liquidation scenario (G)=(F)-(E) […] PostNord Group’s capital injection (H) -2 339

(119) According to Denmark and Sweden, it follows from Table 3 that in case of Post Danmark’s liquidation scenario, the losses that Post Nord Group (being the sole shareholder) would suffer (namely equity losses, ‘G’) amounting to MDKK […] would be higher than the cost that PostNord Group actually suffered by injecting a capital (‘H’) of MDKK 2 339 in order to support Post Danmark.

(120) According to Denmark and Sweden, both analyses presented in recitals (116) and (118) demonstrate the market conformity of the PostNord Group equity injection because the present value of the losses avoided due to the equity injection are higher than the cost of that injection.

(121) The same analyses also shows (presented in Table 4) that the internal rate of return (‘IRR’) of […] % of PostNord Group’s capital injection to Post Danmark would exceed the minimum return required by a market economy operator, that is, the cost of equity of […] % as explained below in recital (148). Balance sheet end of period

Date of cash flow 31-Dec-17 30-Jun-18 30-Jun-19 29-Jun-20 29-Jun-21 30-Jun-22 30-Jun-23 29-Jun-24 29-Jun-25 30-Jun-26 Equity Terminal value Net working capital […] […] […] […] […] […] […] […] […] […] Tangible fixed assets […] […] […] […] […] […] […] […] […] […] Operating capital to finance […] […] […] […] […] […] […] […] […] […] Free cash flow to equity (incl. USO) […] […] […] […] […] […] […] […] […] Excess cash […] […] […] […] […] […] […] […] […] […] Financial fixed assets […] […] […] […] […] […] […] […] […] […] Provisions […] […] […] […] […] […] […] […] […] […] Loans to credit institutions […] […] […] […] […] […] […] […] […] […] Net financial assets and liabilities […] […] […] […] […] […] […] […] […] […] Equity […] […] […] […] […] […] […] […] […] […] Investor capital injections (-)/dividends (+) -2 339 […] […] […] […] […] […] […] […] […] Equity IRR […] % Cost of Equity […] %

(122) Denmark and Sweden claim that the applied assumptions in the DCF models were prudent and conservative since, as evidenced by the sample of postal peer WACC rates, the WACC of […] % used in the DCF model is […] percentage points […] than for comparable entities. Furthermore, the profitability forecasts are reasonable and justified by market studies (57), while the assumptions on the growth rates of revenues and the profitability of Post Danmark were benchmarked against a sample of Post Danmark’s peers (58).

4.1.4. The capital injections from Denmark and Sweden into PostNord AB do not involve State aid

(123) With respect to whether Denmark and Sweden, as owners of and investors in PostNord AB, should have measured the probability of PostNord AB losing investment grade in the absence of the capital injections, they claim that such a requirement is very speculative. Moreover, they consider that comparable owners who consider whether to invest in their own company (as Denmark and Sweden claim they did) have detailed knowledge of their own undertakings, but they may not necessarily have described, calculated and documented all those effects explicitly and in detail before making a specific investment. Requiring such documentation would significantly exceed the documentation that normal market operators would produce prior to such investments. Private undertakings in similar situations would be normally guided by the so-called business judgment rule, in other words, the standard by which management of an undertaking can be liable for its decisions. The crucial question according to this rule is whether the basis for the decision was reasonable, and whether the decision is made in the interest of the undertaking.

(124) Sweden and Denmark argue that the basis for deciding to inject capital into PostNord AB was reasonable, sufficient and similar to what a comparable private investor would have required for the following reasons: (a) prior to making their investment decisions, Denmark and Sweden consulted external financial advisers who carried out market conformity economic evaluations and recommended to carry out the capital injections; (b) Denmark and Sweden have demonstrated that the capital injections were sound investments by quantifying the envisaged costs of not providing the capital, and by making more qualitative assessments of the positive and negative effects of the capital injections; and (c) Denmark and Sweden have demonstrated that they did not have any other incentives for making an investment in PostNord AB other than to make economically rational investment decisions relating to PostNord’s financing of the implementation of the transformation plan of Post Danmark.

(125) In Denmark and Sweden’s view, the DCF analysis demonstrates that their investments have a positive return in the form of value creation, since in case PostNord AB would lose investment grade, it would suffer enterprise value losses of SEK 1 071 million. This would exceed the actual total cost Denmark and Sweden suffered amounting to SEK 667 million, namely the total capital injected by them. They relied on the effects of their investments on the enterprise value of PostNord AB and their objective to protect their value as shareholders (that is, equity value of SEK […]), and, in their view, the MEOP does not require that the owners should carry out economic assessments based on a counterfactual scenario where PostNord AB would be liquidated.

(126) In addition, Denmark and Sweden claim that, even if it was not explicitly mentioned in the owners’ economic analyses, they had in-depth knowledge of the refinancing needs of PostNord. Moreover, Denmark and Sweden have engaged financial advisers (SEB and Rothschild) who have carried out in-depth analyses of PostNord’s financial situation. In those analyses, the maturity of the loans to be refinanced has been considered. Therefore, the assumption that PostNord needed significant refinancing and for that reason had a specific need to remain in investment grade territory, to enable access to the credit market and be flexible in choosing the most suitable and lowest cost sources of financing, has been properly justified in Denmark’s and Sweden’s view.

(127) Finally, Denmark and Sweden claim that, although not required in an MEOP assessment, ex-post evidence, such as the yield of the bonds issued by PostNord and other peers, in 2018 and 2019, demonstrates that the capital injections were indeed in conformity with the market and that absent the capital injections the interest costs could increase by […] basis points.

4.2. Denmark’s comments on the opening decision

(128) Denmark’s individual comments concern only the capital injections from itself and Sweden. Denmark claims that the estimate of the probability of PostNord AB losing investment grade status with and without their own and Sweden’s capital injection was not explicit, but implicit in the Danish authorities’ assessment made prior to their investment decision. According to the assessment, it was likely (that is, […] % to […] % certain) that PostNord AB would lose investment grade in the absence of capital injections from Denmark and Sweden.

(129) Denmark and Sweden’s capital injection of SEK 667 million would ensure that the net debt to EBITDA ratio would remain below […] in the coming years, a level usually required by the financial market to enter investment grade territory. Moreover, the owners’ capital injection would strengthen in itself the creditworthiness of the company by signalling to the financial markets that the owners had assessed and believed in PostNord AB’s future financial performance.

(130) Denmark claims that it would not be standard market practice to proceed with an exact financial calculation of the counterfactual and factual scenarios of whether PostNord AB’s credit rating would be maintained strictly because of the capital injections from Denmark and Sweden, as in view of Post Danmark’s operational transformation, it could be expected that PostNord AB’s creditworthiness would gradually improve in any event.

(131) However, Denmark also considers that Rothschild’s analysis provided an illustrative but realistic example of potential losses of PostNord AB being in non-investment grade, based on the total liabilities existing in 2017 (that is, SEK […]) and assuming a maturity of […] years. That analysis shows that PostNord AB had to be in investment grade territory to ensure low interest for the refinancing of liabilities maturing in the near future. The analysis therefore shows that the realistic risk of PostNord AB losing enterprise value due to increased investment costs would have prompted any private owner investor in similar circumstances to make the capital injection without the level of detail of the assessment required by the Commission.

(132) Denmark also argues that the period where PostNord AB’s investment grade would be maintained due of Denmark and Sweden’s capital injections would be uncertain. However, since the majority of PostNord AB’s liabilities had to be refinanced in 2018 to 2019, it was crucial for PostNord AB to maintain the investment grade in that period. Furthermore, PostNord AB is operating in a market undergoing significant change, which would imply that the financial markets are likely to apply stricter criteria to distinguish between investment and non-investment grade, and to show less flexibility to the net debt to EBITDA ratio. Under those circumstances, PostNord AB’s investment grade rating would remain important for several years, even after the completion of the transformation of Post Danmark.

(133) Denmark claims that net debt to EBITDA ratio would be one of the leading financial metrics used by credit rating agencies to determine an issuer’s default risk, therefore, maintaining that specific ratio below a certain threshold would be crucial for PostNord AB to keep the investment grade rating. At the same time, the financial markets can only base credit assessments on expected future results, for example, the likelihood of the successful transformation of Post Danmark. In this context, the capital injections from Denmark and Sweden to PostNord AB would have affected the risk assessment of the market positively.

4.3. Sweden’s comments on the opening decision

(134) Sweden’ individual comments concern only the capital injections from itself and Denmark. Sweden claims that if PostNord Group were to transfer capital to Post Danmark without the USO compensation from Denmark or capital injections into PostNord AB by the shareholders, the implementation of the transformation plan of Post Danmark would consume the financial resources of the PostNord Group to an extent where the whole group would be at risk.

(135) Sweden estimates that the impact of a bankruptcy of Post Danmark on the equity value of the Swedish holding of shares in PostNord AB in total was uncertain but estimated to be negative.

(136) Sweden claims that with no capital injections and no USO compensation for Post Danmark, the PostNord Group would be regarded as non-investment grade with a significant financial risk, increased borrowing costs and limited financial flexibility. A lower rating could involve adverse impact on customer and supplier relationships, difficulties in retaining talented employees as well as other signalling effects from no (capital) support from the owner. Therefore, Sweden considered that it was crucial to ensure a financial risk level corresponding to a credit rating of, or close to, investment grade quality […], which is comparable to peers.

(137) Sweden, on the basis of a DCF analysis, concludes that, including the Danish aid of SEK 1 533 million related to the USO compensation for 2017 to 2019, the NPV of the Danish business increases from SEK […] to SEK […], which subsequently increases in the value of the shareholders’ equity. The increase in the Swedish shareholder’s equity value of SEK […] clearly surpasses its investment of SEK 400 million, which would show that the decision of Sweden to inject capital into PostNord AB was in line with the MEOP.

4.4. Comments from Denmark and Sweden on third parties comments

4.4.1. The three capital injections constitute three separate measures and not one single measure

(138) For the reasons explained in Section 4.1.1, Denmark and Sweden disagree with ITD and other third parties that the three capital injections should be considered as a single measure. Denmark and Sweden also note, with reference to recital (75) of the opening decision, that the USO compensation for 2017 to 2019 is a distinct measure.

(139) Denmark and Sweden notably consider that ITD’s claim that in order to answer the question of whether several measures should be analysed separately, that one should look at the ‘circumstances of the beneficiary, not the circumstances of the investors’ cannot be accepted. Denmark and Sweden consider that compliance with the MEOP should depend on the economic rationality seen from the perspective of each investor (59).

(140) Regarding the purpose of the three capital injections and the argument from ITD that the alleged funding gap between the estimated costs of the new production model (namely SEK 5 billion according to the October Agreement) and the PostNord Group injection of DKK 2,339 billion would indicate that the capital injections from Sweden and Denmark are in fact also meant for the transformation plan (60), Denmark and Sweden note that the estimated costs of the new production model, as referred to in the October Agreement, do not equal the need for the capital, since the estimated costs include predicted operating losses incurred by Post Danmark itself, making the need for capital less.

(141) On ITD’s claim that the final beneficiary of all three capital injections is Post Danmark (see recital (58)), Denmark and Sweden note that the October Agreement is not intended to identify the real beneficiary for State aid purposes. It is rather an agreement on principles, which was implemented with legally binding commitments vis-á-vis PostNord AB subsequently.

4.4.2. The three capital injections were not granted on the date of the October Agreement

(142) For the reasons explained in Section 4.1.2, Denmark and Sweden also disagree with the position of ITD that the three capital injections were granted on the date of the October Agreement. Denmark and Sweden refer to the conditions listed in the Magdeburger Mühlenwerke and BSCA (61) judgments when explaining that a measure can only be considered granted by a legally binding act by which the competent national authority undertakes to grant the measure to the recipient, by an unconditional and legally binding promise, or when any conditions for obtaining the aid have been met and when the recipient of the aid can be identified.

(143) In Denmark’s and Sweden’s view, the October Agreement does not satisfy any of these three conditions for the following reasons: (a) the October Agreement is not legally binding and Denmark and Sweden did not undertake to grant the capital injections by that agreement. Notably, the October Agreement is an agreement in principle (62) between two States and not an expression of a legally binding commitment towards PostNord AB; (b) the October Agreement was conditional since it requires several implementing measures. Denmark and Sweden in this regard refer to the need to obtain consent from their respective governments and parliaments. Without their consent, Denmark and Sweden could abandon the agreement at any point in time without legal consequences. Even the approval of the respective parliaments would not be sufficient, since they do not oblige the respective governments to dispose of the capital (see recitals (98) and (99)). In addition, the State aid elements of the October Agreement had to be notified to and approved by the Commission. Moreover, in order to condition the payment of the USO compensation on its use for terminating the contracts of former civil servants an implementing agreement (63) between Denmark and PostNord AB was required. The same agreement contains provisions that bound PostNord to implement its own capital injection for Post Danmark (recital (25)). The States also consider that the wording of the October Agreement supports the need for implementing measures, for example, ‘these investments are to be made as a contribution of capital to the Company on market terms without issuing new shares’. It would follow in the view of Denmark and Sweden that the capital injections are conditioned upon being on market terms, which requires further analysis of whether this would be possible (64); (c) the October Agreement does not identify the beneficiaries since the actual beneficiary of the State capital injections is not the same as described in the October Agreement.

(144) Moreover, the States consider ITD’s claim that implementing measures, in order to be characterised as such for State aid purposes, should be laid down ex-ante and that it would be impossible to grant the aid without undertaking the implementing measures (see recital (59)) as irrelevant. In this respect, the States have doubts on the relevance of the case law referred to by ITD. Firstly, the judgment in Arriva Italia and Others was not yet delivered at the moment when ITD submitted its comments. In any event, according to the States, the Arriva Italia and Others case would not concern whether implementing measures could be imposed, or when those measures could be imposed, but rather whether the national law that granted the right to receive the aid contained implementing measures and whether those were fulfilled (65). Secondly, the other judgments referred to by ITD (see footnote 35) concern whether national measures constituted aid schemes and whether the conversion of a company into a particular legal form constituted an aid scheme or individual aid. According to the States, that case law is clearly not relevant for ITD’s claim.

(145) In the view of Denmark and Sweden, ITD’s subsidiary line of reasoning that all three capital injections were granted on 28 May 2018 is not substantiated, as explained in recitals (100) and (101).

(146) Regarding ITD’s reference to the Rigsrevisionen’s report (recital (66)), Denmark and Sweden note the following: (a) when the Rigsrevisionen in its report states that Post Danmark received capital injections from the owners (that is, Denmark and Sweden), this is incorrect, as shown directly from the subsequent sentence where the capital injections are listed: ‘Det fremgår af figur 3, at Post Danmarks regnskabsreglement er blevet ændret 2 gange siden postdirek-tivet fra 2008. Det fremgår desuden, at Post Danmark de seneste år flere gange har fået tilført kapital fra ejerne og koncernen. Det drejer sig om 3 tilførsler i 2017, der henholdsvis medførte 2.340 mio. danske kroner fra PostNord til Post Danmark, 267 mio. svenske kroner fra den danske stat til PostNord og 400 mio. svenske kroner fra den svenske stat til PostNord. I tillæg hertil forpligtede den danske stat sig i 2017 til delvist at kompensere PostNord med 1.533 mio. svenske kroner for udgifter i forbindelse med afskedi-gelser af tidligere tjenestemænd.’ (emphasis added) ‘Figure 3 shows that the Accounting Regulation for Post Danmark has been amended twice since the Postal Directive [Directive 97/67/EC] from 2008. Furthermore, it shows that Post Danmark several times has received capital from the owners and the group. It concerns 3 capital transfers in 2017: DKK 2 340 m from PostNord to Post Danmark, SEK 267 m from the Danish State to PostNord and SEK 400 m from the Swedish State to PostNord. In addition, in 2017, the Danish State committed to partially compensate PostNord with SEK 1 533 m for costs related to the termination of former civil servants.’ (emphasis added) The Rigsrevisionen therefore refers to capital injections from Denmark and Sweden to PostNord AB and not to Post Danmark; (b) the Rigsrevisionen has not gone through Post Danmark’s accounts as claimed by ITD. As clearly stated in the report, the report specifically concerns the supervision by the Danish Ministry of Transport, Building and Housing and the Transport Authority of Post Danmark. (c) the Rigsrevisionen wrongly states in the graph included in the report (referred to in recital (66)) that the different capital injections were transferred in 2017. According to the States, as shown by Post Danmark’s annual report from 2019 (66), the amounts were transferred from PostNord Group in 2018 and 2019, and PostNord AB’s annual report from 2018 also mentions the amount received from the States (67). In any event, the Rigsrevisionen is not a State aid authority and did not make any assessment regarding a granting date relevant for State aid purposes.

4.4.3. The DCF calculations for PostNord Group capital injection into Post Danmark are sound

(147) Denmark and Sweden dispute ITD’s claim that the WACC used for the capital injection from PostNord Group to Post Danmark should have been higher in order to reflect the likelihood that the USO would not be entrusted to Post Danmark. They explain that the USO entrustment has always lied with Post Danmark, and PostNord Group would have had no reason to expect that the Danish State had any intentions to change this situation, especially since the universal service is a cost-intensive obligation and a loss-making activity.

(148) Denmark and Sweden also dispute ITD’s claim that the WACC should have been higher than the WACC of PostNord Group’s peers to reflect the risks related to the realisation of the transformation plan, because the relevant business risk was captured in the underlying business plan, and additional company risk premiums were applied (for digitalisation and size), as shown in Table 5: Table 5 Post Danmark A/S – WACC calculation Capital Asset Pricing Model […] % Risk premium – Size […] % Risk premium – digitalisation […] % Cost of equity […] % Cost of debt […] % Equity ratio […] % Debt ratio […] % WACC […] % Note: Tax rate 22 %

(149) Furthermore, Denmark and Sweden claim that the performance of Post Danmark would have improved compared to the targets set in the business plan for 2018 to 2020 as stated in PostNord AB’s annual report 2018 at page 25. In both Denmark’s and Sweden’s opinion, this supports the conclusion that the assumptions of the DCF calculation were prudent and conservative. It also disproves ITD’s claim that the trend in Post Danmark’s operating results since 2017 has been exclusively and increasingly negative. On the contrary, there has been an upward trend in the EBIT before items effecting comparability. As stated in PostNord AB’s annual report 2018, the reduced losses are due to the implementation of the transformation plan.

(150) Contrary to ITD’s arguments, Denmark and Sweden consider that their capital injections into PostNord AB should not have been included in the DCF for the group capital injection. However, Denmark and Sweden argue that even if the capital injections were included in the calculation of the NPV of PostNord Group’s capital injection in Table 1 of the opening decision, thereby increasing the capital injection (A) by SEK 667 million (DKK 460 million), the total value net of the capital injection (G) would remain positive, namely about DKK […] (DKK […] – DKK 460 million).

(151) Contrary to ITD’s arguments, Denmark and Sweden also consider that the one-off effect related to the real-estate credits in Denmark (DKK […]) should have been included in the DCF for the PostNord Group capital injection, because the inclusion of this effect was based on cross-default clauses in PostNord Group’s credit facility. In any event, according to the States, the inclusion of the real-estate one-off effect in the DCF does not have any substantive impact on the result, and even if the real-estate one-off effect had been excluded, the total value net of the capital injection would have remained positive.

(152) In response to ITD’s argument that the USO compensation involves State aid and thus should be excluded from the DCF analysis, the two States claim that the USO compensation was neutralised in the DCF by corresponding costs connected with the loss-giving USO.

(153) Finally, in response to ITD’s argument that the DCF model was designed by PostNord itself, the States argue that public undertakings such as PostNord obviously have internal competent people who are perfectly capable of carrying out an investment analysis, which satisfies the MEOP, rather than assigning it to an independent expert.

5. ASSESSMENT

5.1. Qualification of the capital injections as one measure or three separate measures

(154) ITD (as well as other third parties) claims that all capital injections should be considered as one measure (see Section 3.1.1). Denmark and Sweden, on the contrary, claim that the capital injections should be considered as three separate measures (see Section 4.1.1). The Commission in the opening decision considered that the three capital injections are three separate measures each requiring their own proper assessment (see recital (69) of the opening decision).

(155) After reviewing all comments received in the formal investigation procedure, the Commission maintains its view in the opening decision that the three capital injections are three separate measures each requiring its own distinct assessment.

5.1.1. Different investors

(156) PostNord Group, Denmark and Sweden are not the same investor. The logic and the decisional process for carrying out the capital injections are different for each of the investors concerned (as shown by the different reasoning presented by Denmark and Sweden in Sections 4.2 and 4.3). The market conformity of those measures cannot be assessed as a single measure since Sweden, Denmark and PostNord Group each have their own distinct financing cost and each require their own return on investment. This means, for example, that an operation could be economically justified for either Sweden or Denmark, but not for the other Member State.

(157) The decisional processes of the two States are entirely distinct (see recital (98) and (99)) and involve completely different actors. As regards the respective capital injections of Denmark and Sweden, with respect to their capacity as shareholders of PostNord AB, Sweden and Denmark are also in different financial situations from each other, as they have different financial costs and requirements for return on investments and have also different borrowing costs. At the same time, Sweden and Denmark are in different situations from PostNord Group. PostNord Group also has its own internal decision making process and already had started with the preparations for the implementation of the transformation plan in autumn 2016, which eventually led to its capital injection. Even if PostNord Group needs to take into account the position of its shareholders with regard to its own capital injection to Post Danmark, it is not possible to align its decisional process with the independent decisional processes of Denmark and Sweden. The market conformity of the PostNord Group capital injection therefore needs to be assessed in light of the consequences of that investment for PostNord Group.

5.1.2. Different beneficiaries

(158) Contrary to what ITD and the other third parties argue, all three capital injections do not have the same beneficiaries. PostNord Group’s capital injection was paid to Post Danmark, while the capital injections from Denmark and Sweden were paid to PostNord AB.

(159) ITD and other third parties dispute that fact (see recital (58)) on the basis of the terms of the October Agreement. Firstly, the way in which ITD has presented the quote of the October Agreement (‘the Company [PostNord] will transfer [that] capital to Post Danmark’) creates the false image that in the end PostNord AB would transfer capital in the amount of SEK 5 billion to Post Danmark. The word ‘that’ has been added by ITD and, according to the Commission changes the meaning. The full quote reads as follows: ‘In order to meet the challenges of digitalization in Denmark, the Company has developed a new production model with an estimated cost of approximately SEK 5,0 bn, including a reduction in the number of employees in the Danish business by approximately 4 000 between 2017 and 2020 (“the new production model”). As an element in the implementation of the new production model, the Company will transfer capital to Post Danmark as outlined in the Company’s board of directors’ proposal of 29 September 2017.’ (68).

(160) It follows from this quote that no link is being made between a capital injection of SEK 5 billion and the alleged fact that this would all be transferred to Post Danmark. It is simply stated that as an element in the implementation of the new production model, the Company would transfer capital to Post Danmark. This does not preclude the fact that as another element of the new production model, separately, capital would be transferred to PostNord AB. This is precisely what happened, as it results from paragraph 4 of the October Agreement: The Company has estimated the need for capital to be SEK 3,0 bn whereof the Swedish Shareholder agrees to invest SEK 400 m and the Danish Shareholder agrees to invest SEK 267 m to support the implementation of the new production model and the Company will provide the additional funding. These investments are to be made as a contribution of capital to the Company[ (69)] on market terms without issuing new shares (70) (emphasis added).

(161) Secondly, both the Danish Decree referred to in recital (101)(a) and the Swedish parliament’s decision referred to in recital (101)(b) speak about a transfer of capital to PostNord AB. The Danish Decree states […] (71). The Swedish parliamentary decision states: ‘the bill is proposed to the Riksdag to authorise the Government to decide on capital injections to PostNord AB of a maximum of SEK 400 million’ (72).

(162) Moreover, the Commission did not find in the course of its formal investigation any element contradicting the information submitted by Denmark and Sweden (recital (94)).

(163) Therefore, the Commission considers that the October Agreement was an agreement, in principle (see recital (143)(a)), that did in fact leave significant margin to the States and PostNord AB in the actual implementation of concrete measures. For example, the amount finally granted to Post Danmark through the PostNord Group capital injection does not correspond to the amounts envisaged in the October Agreement. The terms of the October Agreement cannot therefore be considered as a decisive proof of the beneficiaries of the capital injections from Denmark and Sweden.

(164) The Commission considers that the capital injections from Denmark and Sweden by benefitting PostNord AB and all its subsidiaries, also indirectly benefits Post Danmark by protecting PostNord AB. By contrast, the PostNord Group capital injection benefits directly Post Danmark, which can make use of the capital received to finance the transformation plan.

5.1.3. Different purpose

(165) It is undisputed that the PostNord Group capital injection has the explicit purpose of permitting Post Danmark to implement its transformation plan.

(166) The capital injections from Denmark and Sweden are paid to PostNord AB, and benefit the whole Group. Denmark and Sweden have explained that the purpose of their respective capital injections is the preservation of the investment grade shadow rating of PostNord AB (see recitals (30) and (33)). As PostNord AB does not have an official credit rating, the objective would be essentially to ensure a financial risk level corresponding to a credit rating of, or close to, investment grade quality […] (see recitals (30) and (33)). The Commission considers that, as such, preserving the creditworthiness of PostNord AB, which finances itself on the market, is an understandable and rationale economic objective for its shareholders.

5.1.4. Requirement to have implementing measures

(167) The Commission considers that the October Agreement is not the act by which any of the three capital injections have been granted. Indeed, it results from the terms of the October Agreement that it was an agreement in principle, and the granting of all three capital injections required subsequent implementation measures, as explained by Denmark and Sweden (see recital (143)(b)).

5.1.5. Response to the third parties arguments

(168) ITD argues that the Commission should have looked at a different set of criteria to establish whether the three capital injections constitute in fact one single measure.

(169) However, based on settled case law (73) and Article 6(1) of Council Regulation (EU) 2015/1589 (74), the Commission is to rely on all the relevant elements of fact and law in its assessment, and not on a set of criteria determined in a limitative manner, and in this case the Commission has taken into account all relevant elements of fact and law. However, also when looking at the criteria put forward by ITD, the Commission comes to the same conclusion, namely that the three capital measures are separate measures.

(170) Firstly, ITD’s claim that the chronology for all three capital measures is identical since all three were in their view granted on the date of the conclusion of the October Agreement, namely on 20 October 2017. This claim is strongly linked to the granting date of the measure. As explained in Section 5.2, the Commission considers the capital injections to be granted on different dates. For this reason, the chronology of the capital injections is different.

(171) Secondly, as regards the purpose of the three capital injections, the Commission maintains its conclusion that the capital injection from the PostNord Group and those from the States have a different purpose. The Commission considers that the funding gap that ITD observes (see recital (55)(b)) cannot be proof that the capital injections of Denmark and Sweden also had the purpose to facilitate the implementation of the transformation plan and therefore, together with the Post Nord Group injection, would have constituted one single measure, all the more since there would still be a funding gap even if those measures were taken into account. Moreover, the States have explained that the funding gap corresponds in fact to the estimated operating losses incurred by Post Danmark (see recital (140)).

(172) Thirdly, considering that the capital injections have different beneficiaries and/or different investors it follows that also the context in which those capital injections were made is different and that the circumstances of the beneficiaries is equally different. Therefore, the Commission concludes that the circumstances of the capital injections are not the same.

(173) The Commission also maintains that the case law cited by ITD in its original complaint and in its comments on the opening decision do not support its argument that the three capital injections constitute one measure.

(174) First of all, as already emphasised in recital (169), in Greece and Others v Commission (75), the General Court found at paragraph 178 that all elements of fact and law which are relevant for that case are to be taken into account. This goes beyond taking into account only the chronology, purpose and circumstances.

(175) Second, as regards Bouygues and Bouygues Télécom v Commission and Others (76) (see recital (33) of the opening decision) and BP Chemicals v Commission (77), the Commission notes that the facts of those cases are different from those of the present case, as in the present case there are different grantors, each requiring its own assessment. The pertinence of this difference is illustrated by the BP Chemicals judgment (to which Bouygues and Bouygues v Télécom v Commission refers), where the General Court found that the Commission must determine whether the measures are severable ‘in a case such as this, which concerns three capital injections made by the same investor […]’ (78) (emphasis added). This shows that the identity of the investor(s) is one of the elements to be taken into account when assessing if the capital injections are a single measure or several, using also other relevant elements.

(176) Third, it should be noted that even though Bouyges and Bouygues Télécom v Commission refers to the chronology, purpose and circumstances of the undertaking when assessing whether consecutive interventions constitute State aid, this does not exclude that other criteria can also be taken into account. Indeed, the Court stated ‘that [i.e. considering several consecutive