Sunday 25 September 2016

Five months on from first approach, IAG still can't get the clearance to land airline deal

Published 14/05/2015 | 02:30

The Government wants assurances on the future use of Heathrow slots, connectivity, net job growth and more, having put IAG through the ringer to come up with solutions.
The Government wants assurances on the future use of Heathrow slots, connectivity, net job growth and more, having put IAG through the ringer to come up with solutions.

Five months ago today, IAG made its first approach to buy Aer Lingus, marking what would be the beginning of a political and corporate saga that has divided public opinion.

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Two days later, on December 16, Aer Lingus told IAG it wasn't interested based on the €2.30 per share that was on the table. By the end of January, IAG had offered €2.55 a share and things really got going.

Had this been a straight corporate deal it would have already concluded - one way or the other - by now.

But it's stuck in a political quagmire.

The Government wants assurances on the future use of Heathrow slots, connectivity, net job growth and more, having put IAG through the ringer to come up with solutions.

Engineering some of the agreements involves passing them by bureaucrats and lawyers in Brussels to ensure they wouldn't fall foul of competition law. That can take time, and is certain to have helped drag out the whole process.

IAG has also indicated that it would only make a formal offer to buy Aer Lingus if, aside from first receiving an assurance from the Government that it will sell the State's 25.1pc stake, that Ryanair also gives an undertaking to sell its holding in Aer Lingus.

Ryanair owns just under 30pc of its smaller rival.

For a number of weeks, it has appeared that an announcement was imminent by the Government on whether it would sell the Aer Lingus stake.

But just last week, Tanaiste and Labour leader Joan Burton said any announcement could still be weeks away, ensuring the whole affair continues into its sixth month.

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