Ryanair can’t understand why EU still blocks Aer Lingus acquisition
Ryanair hungers for Aer Lingus (pictured), but it looks like the competition concerns will prevail. / Flickr.com
This is the second time in the last six years that the EU is apparently thwarting Ryanair’s attempt to acquire Aer Lingus on antitrust grounds. Ryanair may appeal, and it is alleging unfair treatment, but it looks like this deal may be grounded.
Ireland-based Ryanair Holdings plc said it was notified that the EU Commission intends to prohibit Ryanair’s offer for Aer Lingus Group plc despite the fact that Ryanair has met every competition concern raised.
Those concerns were expressed in the EU’s Statement of Objections and during the review process, the airline states.
At the EU’s request, Ryanair obtained irrevocable commitments from not one, but two, upfront buyers to eliminate all competitive overlaps between Ryanair and Aer Lingus, Ryanair states.
Ryanair said it plans to appeal any prohibition decision to the European Courts.
Ryanair stated that IAG has committed that they would take over divestments of Ryanair’s and Aer Lingus’ entire London-Gatwick operations, and Flybe has committed to take over 43 Aer Lingus UK and European routes.
Given that the EU Commission recently approved IAG’s acquisition of BMI at London-Heathrow on the basis of three-year commitments, the EU’s claim that it could not be satisfied of IAG’s and Flybe’s commitments to these Irish routes after three years is another example of the EU holding Ryanair to a much higher standard than any other EU airline.
Ryanair’s remedies package is unprecedented.
In August 2012, Ryanair had said that it intends to re-bid for Aer Lingus if the European Commission clears its offer following its Phase II review. In June 2012, Ryanair had said that it plans to make an all-cash offer of 1.30 euros per share for rival Aer Lingus Group, valuing that company at about 694 million euros or $879 million.
Ryanair had first tried to acquire Aer Lingus in late 2006, but that bid was blocked by the European Commission on antitrust grounds.
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