UK watchdog to force Ryanair to sell most of its near 30pc stake in Aer Lingus
Ryanair will be forced to cut its stake in Aer Lingus to no more than 5pc, a UK competition watchdog has ordered this morning.
The Competition and Markets Authority (CMA) said today that it has provisionally decided that it doesn’t agree with Ryanair’s contention that because IAG made an approach to buy Aer Lingus that Ryanair should not now be forced to offload most of its near 30pc stake in its smaller rival.
The CMA's predecessor, the Competition Commission, ordered Ryanair in 2013 to reduce its Aer Lingus holding, citing competition concerns. The watchdog also claimed that because Ryanair was such a big shareholder in Aer Lingus, it was likely to deter other airlines from making a bid to buy Aer Lingus.
Ryanair has claimed the fact that IAG has now made an approach to buy Aer Lingus negates a fundamental plank of the CMA decision to make it cut its stake in its smaller rival.
Ryanair asked the CMA to consider that a material change of circumstances had now occurred, which made the original order to cut the Aer Lingus stake invalid.
The CMA said this morning that an inquiry group of independent CMA members has provisionally decided that there is no material change in circumstances or special reason not to proceed to implement the remedies it previously set out.
Ryanair criticised the decision and a spokesman described it as “manifestly wrong”.
“The recent offers by IAG for Aer Lingus totally disprove and undermine the bogus theories and unsubstantiated evidence on which the CMA’s final report was based,” said Ryanair spokesman Robin Kiely.
He insisted that the divestment remedy must be revoked in light of the “compelling” new evidence.
Ryanair is also trying to appeal the findings of the CMA’s previous final report to the UK’s Supreme Court.
“We have carefully considered submissions from Ryanair and others and taken into account all relevant circumstances, including the fact that the IAG bid is conditional on receiving an irrevocable commitment from Ryanair,” said Simon Polito, chairman of the CMA Ryanair/Aer Lingus inquiry group.
“Having done so, our provisional view is that neither recent events nor the time that has passed since our final report are reasons not to implement the divestment remedy.”
The Government is expected to make a decision in the next couple of weeks on whether it will support a sale of the State’s 25.1pc stake in Aer Lingus to IAG as part of a €1.4bn takeover.