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British Airways owner IAG SA sought to reassure the Irish government with a set of what it called legally binding commitments to protect air services to Ireland if it succeeds in buying Aer Lingus Group Plc.
The commitments would “go well beyond the protections currently available,” London-based IAG said in a statement today. IAG ownership would “secure and strengthen” the future of the Irish carrier, “offering significant benefits to both Aer Lingus and its customers.” The company didn’t specify how it plans to protect jobs, a key concern for Irish lawmakers critical of the proposed combination.
Under the terms proposed today, IAG would not sell Aer Lingus’s 23 slot pairs at London Heathrow and the Irish carrier would remain based in Ireland. IAG also committed to operating the slots on Irish routes for five years.
International Consolidated Airline Group, as the company is formally known, raised its proposed offer for a second time last week to 2.50 euros a share plus a 5 cents cash dividend. The Aer Lingus board said that the terms, which value the Irish carrier at about 1.36 billion euros ($1.54 billion), are sufficient for it to recommend an offer to investors.
“We want to develop air services that ensure Ireland’s connectivity is enhanced,” IAG Chief Executive Officer Willie Walsh said in the statement. The pledge is subject to takeover rules and a European Union competition review, IAG said.
Any proposal requires the backing of Ryanair Holdings Plc and the Irish government, the biggest shareholders. Ryanair said today that it has so far not received a formal approach from IAG regarding its stake in Aer Lingus of just under 30 percent.
This article was written by Kari Lundgren from Bloomberg and was legally licensed through the NewsCred publisher network.