Business Irish

Thursday 18 January 2018

Ryanair faces wait to hear on Aer Lingus stake sale

John Mulligan

John Mulligan

It's likely to take the UK's competition watchdog another month to decide if it should reverse a decision to force Ryanair to cut its stake in Aer Lingus to no more than 5pc, the Irish Independent understands.

That could conceivably delay a sale of Aer Lingus even further.

The Competition and Markets Authority (CMA) is a key player in the takeover battle for Aer Lingus because it has the authority to grant Ryanair permission to sell its entire Aer Lingus stake to IAG - an undertaking IAG wants before it makes a formal offer to buy the Irish airline.

Ryanair has recently opened a fresh front against the CMA in its efforts to force the authority to reverse a 2013 decision that the airline should cut its stake in Aer Lingus to no more than 5pc. Ryanair owns close to 30pc of Aer Lingus.

That decision was made partly because the CMA said a potential bidder for Aer Lingus could be deterred from making a takeover approach because Ryanair was such a big shareholder in its smaller rival.

In February, the UK's Court of Appeal upheld the CMA's 2013 decision.


But Ryanair argued that the CMA is now obliged to reassess its original findings because there has been a material change of circumstances - namely, the takeover approach made by IAG for Aer Lingus.

The Department of Transport and Aer Lingus have urged the CMA to stick to its 2013 decision on the enforced sale.

Lawyers for Aer Lingus have warned the CMA that Ryanair shouldn't be allowed to impede a possible sale to IAG and that the success of the IAG offer "may depend" on the CMA upholding its original decision.

It's understood the CMA will issue a provisional finding on Ryanair's request to reverse the 2013 decision within a month or so.

However, the CMA will then solicit further views from interested parties before making a final determination. That will drag the process out even longer.

However, in the meantime, Ryanair could still ask the CMA for permission to sell its entire Aer Lingus stake to IAG.

Irish Independent

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