Saturday 1 October 2016

Aer Lingus takeover: IAG's €1.4bn purchase of airline gets EU approval

Published 10/07/2015 | 07:51

Aer Lingus
Aer Lingus
Aer Lingus CEO Stephen Kavanagh. Photo: Mark Condren
Ryanair CEO Michael O'Leary

IAG has received EU anti-trust approval for its €1.4bn takeover of Aer Lingus after it agreed some some concessions..

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"The concessions include giving up some airport slots in London and special prorate agreements with rivals," Reuters reported.

Prorate deals typically allow competing airlines to obtain favorable terms allowing them to carry passengers on connecting flights in order to feed into the rivals' own flights.

IAG had previously offered only prorate deals but was forced to bump up concessions after the European Commission said these were not sufficient. The EU competition authority is scheduled to rule on the IAG takeover bid by July 15.

IAG owns British Airways and is headed up by Dubliner Willie Walsh.

Earlier today the board of Ryanair has voted unanimously to accept the IAG offer for the airline's 29.8pc shareholding in Aer Lingus.

The move makes the €1.4bn offer from IAG for Aer Lingus more likely but it not a fait accompli yet and needs more approval..

Ryanair’s stake in Aer Lingus has been available for sale since May 2012  and the board believes that the current IAG offer maximises Ryanair shareholder value.

The airline said it will now vote in favour of the motion at the Aer Lingus extraordinary general meeting later this month to give the Government a golden share over Aer Lingus’s Heathrow slots.

Ryanair also said it will vote in favour of acceptance of the €1.4bn bid by British Airways owner IAG for Aer Lingus, subject to this offer receiving regulatory approval from the European competition authorities.

“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," chief executive Michael O'Leary.

The airline said it will make a small profit on its investment in Aer Lingus over the past 9 years.

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