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Commission could block Ryanair merger plans for second time

By Ian Wishart  -  14.02.2013 / 04:15 CET
Takeover of Aer Lingus could be in jeopardy.

Ryanair, an airline based in Ireland, said on Tuesday (12 February) that the European Commission was planning to block its takeover of Aer Lingus. If this decision were to be endorsed by European commissioners, it would be the second time that the proposed merger has been rejected – an unprecedented step.

The Commission blocked Ryanair's first planned takeover of Aer Lingus, formerly Ireland's state-owned flag-carrier, in 2007. Ryanair abandoned a second attempt two years later after the Dublin government came out against it. It made a third bid in June.

Ryanair issued a statement on Tuesday saying that its representatives had been informed that the Commission was planning to halt the takeover again, over competition concerns.

“The EU Commission intends to prohibit Ryanair's offer for Aer Lingus, despite the fact that Ryanair has met every competition concern raised in the EU's statement of objections and during the review process,” the airline said. It indicated that it was likely to appeal against such a decision.

Reduced competition

Ryanair already owns 30% of Aer Lingus, but has run into trouble in its attempts to buy a controlling stake because the Commission has raised concerns that this would reduce competition on flights to and from Ireland.

Among concessions proposed by Ryanair, it has offered to subsidise the British low-cost operator Flybe so that it can take over some of Aer Lingus's routes and persuade regulators that it can provide competition.

The Commission has a deadline of 6 March to issue its ruling on the merger. Ryanair has until then to come up with additional concessions. It is still rare for the Commission to take a decision to block proposed mergers. However, rejection of the Ryanair-Aer Lingus takeover would be the second high-profile deal halted in a matter of weeks, after a tie-up between parcel delivery companies UPS and TNT was ruled out last month.

© 2014 European Voice. All rights reserved.

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