Aer Lingus sale to IAG set to be cleared by Brussels next week
Published 11/07/2015 | 02:30
IAG's €1.36bn takeover of Aer Lingus looks set to secure formal approval next week from the European Commission.
Mr O'Leary described the IAG offer for Aer Lingus is "reasonable" and that it's in the best interests of Ryanair shareholders to accept it.
The European Commission is due to make public by next Wednesday a decision on whether or not to sanction the Aer Lingus takeover.
News agency Reuters said that the commission intends to give the go-ahead for the take-over, after IAG improved concessions it's prepared to offer to gain competition approval.
Those concessions will include handing over some take-off and landing slots in London so they can be used by competitors. It is understood slots at Gatwick and Heathrow are most likely to be up for grabs.
Read More: Aer Lingus takeover: So what happens now?
Aer Lingus will hold an extraordinary general meeting next Thursday where its shareholders will vote on the IAG takeover offer.
IAG, headed by Willie Walsh, yesterday welcomed Ryanair's decision to sell.
The Government has already said it will sell the State's 25.1pc Aer Lingus holding to IAG, while Abu Dhabi-based Etihad said it intends also to sell its near 5pc stake in Aer Lingus to the British Airways owner.
Transport Minister Paschal Donohoe also welcomed the Ryanair decision.
"It's a very important development in the future of Aer Lingus," he said. "That points, I believe, to an even more secure future for Aer Lingus. We will await what the European Commission will decide."
Ryanair paid a total of €407m buying its Aer Lingus stake.
Under the terms of the IAG offer, which includes €2.50 per Aer Lingus share and a five cent dividend that has already been paid, Ryanair will get €405m.
It also received an additional €17.5m in dividends from Aer Lingus between 2012 and 2014.
Ryanair tried three times to buy Aer Lingus, but it was blocked by the European Commission.
Ryanair had also been ordered by the UK's Competition and Markets Authority (CMA) to cut its stake in Aer Lingus to no more than 5pc over competition fears - a decision Ryanair has been battling in the UK courts.
A spokesman for the CMA told the Irish Independent that the authority "wouldn't necessarily" have to examine the planned takeover of Aer Lingus by IAG because the European Commission is probing it.
However, he said the CMA will have to approve the buyer of Ryanair's Aer Lingus stake.
Ryanair has already written off its entire shareholding in Aer Lingus, so the proceeds will provide a boost to its balance sheet.
David Holohan, the head of research at Merrion Capital, said that the Ryanair decision to sell isn't a surprise.
He told the Irish Independent that it now gives institutional Aer Lingus shareholders more clarity ahead of next week's extraordinary general meeting.
"I'd expect the whole thing to be wrapped up by the end of the third quarter," he said.