Tuesday 25 October 2016

EU clears way for takeover of Aer Lingus by IAG

Takeover bid for Aer Lingus
Takeover bid for Aer Lingus

The European Commission has cleared the €1.36bn takeover of Aer Lingus by IAG.

It means the deal is now almost certain to go ahead.

Aer Lingus shareholders will vote on the takeover on Thursday. But the Government, Ryanair and Etihad, which between them control close to 60pc of Aer Lingus, have already given their support to the acquisition.

The European Commission said this evening that it had concerns that the merged entity would have faced insufficient competition on several routes. The Commission also found that the merged entity would have prevented Aer Lingus from continuing to provide traffic to the long-haul flights of competing airlines on several routes.

“By obtaining significant concessions from the airlines the Commission has ensured that air passengers will continue to have a choice of airlines at competitive prices after IAG's takeover of Aer Lingus,” said the European Commissioner in charge of competition policy, Margrethe Vestager.

“The five million passengers travelling each year from Dublin and Belfast to London will be able to choose among several strong carriers,” she added. “And we are also protecting passengers travelling on connecting flights between Ireland and the rest of the world."

IAG is providing a number of commitments in order to secure takeover approval.

Five daily takeoff and landing slots at Gatwick must be relinquished in order to facilitate the entry of competing airlines on routes from London to both London and Belfast.

Aer Lingus must also continue to carry connecting passengers to use long-haul services of competing airlines out of Heathrow, Gatwick, Manchester, Amsterdam, Shannon and Dublin.

“These commitments adequately address all competition concerns identified by the Commission,” it said. “The Commission therefore concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or a substantial part of it.”

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