THE EUROPEAN Commission has set a deadline of February 12th for the conclusion of its phase one investigation into Ryanair’s proposed €748 million takeover of Aer Lingus.
This falls just one day before Ryanair’s own extended deadline of February 13th for shareholders in Aer Lingus to accept its €1.40 a share offer for the airline.
Sources close to the deal said the commission’s investigation of the proposed merger could be extended to a more in-depth phase two review. That could involve negotiations on remedies to potential competition issues.
EU competition commissioner Neelie Kroes blocked Ryanair’s 2006 takeover bid of Aer Lingus. At that time, she ruled that the pair would have a monopoly position at Dublin airport and “very high market shares on all 35 routes on which their activities overlap”.
Legal sources said the commission was likely to apply the same methods to the current investigation and that Ryanair would face significant hurdles in its bid to persuade the body to allow the deal.
Ryanair has already offered a number of guarantees to its offer for Aer Lingus.
These include vesting rights over the use of Aer Lingus’s Heathrow slots with the Oireachtas, and putting in place separate €100 million bonds if Ryanair fails to honour stated commitments on reducing fares and abolishing fuel surcharges. Ryanair also offered to restore the Shannon-Heathrow route that had been axed by Aer Lingus but the former national airline in December announced plans to restore these flights. Aer Lingus also recently scrapped its fuel surcharge on transatlantic flights.
The EU deadline was posted on the commission’s website yesterday after Ryanair had lodged its merger notification in Brussels on Thursday evening.
Earlier this week, Ryanair said it had received acceptances from 29.83 per cent of Aer Lingus shareholders by its original January 5th deadline for the offer.
This included its own 29.82 per cent stake in Aer Lingus and fell well short of the 90 per cent level it is seeking for its all-cash offer.
Ryanair declined to comment on its engagement with the European Commission.
