Business Irish

Wednesday 27 August 2014

Ryanair to fight EU decision to reject its bid for Aer Lingus

Ed Carty

Published 12/02/2013 | 13:06

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EU blocks Ryanair

RYANAIR has admitted defeat in its renewed takeover bid for rival Aer Lingus, but vowed to fight the decision in the courts.

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The low-cost carrier said it had been notified by the European Commission that the €694m buyout plan would be rejected.

Ryanair claimed European chiefs were holding it to much higher standards than any other EU airline.

"It appears clear from this morning's meeting that no matter what remedies Ryanair offered, we were not going to get a fair hearing and were going to be prohibited regardless of competition rules," Ryanair spokesman Robin Kiely said.

Ryanair said it was told of the decision at a state of play meeting with the EU Commission this morning.

The takeover plan - a third bid by Michael O'Leary for Aer Lingus - appeared to have been boosted last week when Flybe agreed a plan to fly 43 of Aer Lingus' short-haul routes, easing competition concerns.

There had also been a commitment from the IAG airline group to run overlapping Aer Lingus/Ryanair routes between Dublin and London Gatwick to ensure competition.

Mr Kiely said: "Given Ryanair's remedies package clearly addresses every issue raised in the EU's Statement of Objections, any decision to prohibit would be manifestly unfair and in contravention of EU competition rules.

"This decision is clearly a political one to meet the narrow, vested interests of the Irish Government and is not based on competition law."

Ryanair has instructed lawyers to appeal the refusal to the European courts.

Aer Lingus said it was in a much stronger position now than at the time of the first takeover bid in 2007.

"The reasons for prohibition are therefore even stronger in this instance than with the previous offers. Therefore, it was and remains Aer Lingus' position that the offer should never have been made," a spokesman said.

Aer Lingus said it has not received notification from the Commission of the decision.

Leo Varadkar, Irish Transport Minister, said the Ryanair offer did not come up to the required standards to ease concerns over competition.

"I note the Ryanair statement. As I have stated before, the Ryanair remedies package as reported has not satisfied the Government's concerns about connectivity, competition or employment," Mr Varadkar said.

"I do not wish to make further comment until the European Commission has formally made its decision."

The Irish Government retained a 25% stake in Aer Lingus after its privatisation in 2006.

The former flag carrier was hit by Ryanair's first takeover challenge a year after the floatation but Aer Lingus now maintains its rival is its only significant competitor on most routes in and out of Ireland.

Ryanair's first attempt to take over Aer Lingus was prohibited in 2007 on competition grounds.

Aer Lingus, which last week posted strong 2012 results with operating profit up 41% to 69.1 million euro (£59m), said it would continue to assist a UK Competition Commission (UKCC) investigation into Ryanair's shareholding.

"Ryanair has on a number of occasions attempted to halt this separate UKCC investigation, including by means of its third hostile takeover offer," Aer Lingus said.

"Aer Lingus now looks forward to the conclusion of the UKCC investigation. As indicated previously it is Aer Lingus' position that Ryanair, as our largest competitor should be required to divest its shareholding."

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