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Putting an end to possible delays from legal disputes over its shares in rival Aer Lingus, Ryanair’s Board has voted in favor of accepting IAG’s offer to buy Ryanair’s 29.8% stake of the flagship Irish carrier, subject to regulatory approval from the European competition authorities.
The Board determined the offer from IAG maximized Ryanair’s shareholder value. The low-cost airline will now vote in favor of the motion at the Aer Lingus EGM on July 16.
“We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders. The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past 9 years,” says Ryanair’s CEO Michael O’Leary.
“This sale of our stake is timely given that our original strategy for Aer Lingus—to use it as a mid-priced brand to offer competition to flag carriers at primary airports—has been overtaken by the successful rollout, since Sept 2013, of Ryanair’s ‘Always Getting Better’ strategy, which has seen the Ryanair brand successfully enter many of Europe’s primary airports, being rewarded with strong growth in our network, traffic, load factor and profitability, while keeping our fares low and our punctuality high.”
“We wish IAG well with their takeover of Aer Lingus,” O’Leary added. “When Ryanair first bid for Aer Lingus in late 2006, Ryanair—36 million passengers—carried four times Aer Lingus traffic—9million. Today Ryanair—at over 100 million—carries more than 10 times Aer Lingus traffic—at 10 million—and we will continue to deliver the vast majority of Ireland’s traffic and tourism growth in the coming months and years.”