Tuesday 21 November 2017

O'Leary meets with Competition Commission over Aer Lingus bid

John Mulligan

John Mulligan

Michael O'Leary and a number of advisers visited Brussels yesterday for the first round of talks with the EU's Competition Commission, as the Ryanair boss launches a third takeover attempt for Aer Lingus.

It is understood that the meeting, held over a matter of hours, largely centred on making introductions and delivering a basic outline of Ryanair's €694m strategy to take over Aer Lingus -- the third time in less than six years that it is seeking to do so.

Sources told the Irish Independent that EU Competition Commissioner Joaquin Almunia was not involved in the talks yesterday.

The Irish Independent also understands that Ryanair is likely to wait nearly the full 28 days it has from last Tuesday under takeover rules before lodging its formal €1.30 a share offer for Aer Lingus. That will make it mid-July before the full details of the bid are known.

Mr Almunia told Bloomberg television yesterday that any proposed acquisition of Aer Lingus by Ryanair would need to be looked at "from scratch".

The European Commission blocked Ryanair's initial 2006 approach to buy Aer Lingus on the grounds that there were too many competition concerns related to the routes operated by the duo, many of which overlap, and also due to the fact that a combined entity would control the bulk of the passenger traffic out of Dublin.

Approval

Mr Almunia said he couldn't predict at this stage what conversation Ryanair executives would be having with his staff, but acknowledged that the EU had approved the 2011 merger of British Airways and Iberia, following lengthy negotiations with the Competition Commission. It was approved based on a number of conditions, such as slots being sold.

"We will not base our future decision . . . on what we said years ago because maybe the situation, the conditions, the environment has changed," he said.

The Ryanair takeover document -- likely to extend to as many as 200 pages -- will detail precisely the terms of the offer and the remedies Ryanair is proposing in an effort to smooth the acquisition plan with Aer Lingus shareholders, including the Government with a 25.1pc stake.

Aer Lingus said this week that it believed Ryanair was currently under a "legal prohibition" from undertaking any further integration with Aer Lingus without the consent of the UK's Competition Commission.

The watchdog has just launched a probe into Ryanair's existing 29.8pc stake in Aer Lingus to determine whether it has exerted undue influence on its smaller rival and hampered competition.

However, Ryanair is certain to have sought legal advice on the matter before proceeding with the bid and clearly thinks otherwise.

Transport Minister Leo Varadkar is due to discuss the Ryanair approach with his cabinet colleagues on Tuesday.

Shares in Aer Lingus closed up 1.7pc at €1.07 yesterday, while Ryanair stock was 1.5pc higher at €4.08.

Irish Independent

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