Ryanair loses latest battle in bid for Aer Lingus

Ryanair Holdings lost its latest bid to buy Irish rival Aer Lingus Group after the European Commission ruled a deal would hurt competition.

Ryanair Holdings lost its latest bid to buy Irish rival Aer Lingus Group after the European Commission ruled a deal would hurt competition.

It is the third time European Union regulators have blocked the €694m takeover.

The Commission had already informed the discount carrier of its intention to prohibit the offer earlier in the month.

Advertisement - Article continues below

The watchdog said the merger would have created a monopoly in Ireland, where Ryanair and Aer Lingus are currently direct competitors.

"The Commission's decision protects more than 11m Irish and European passengers who travel each year to and from Dublin, Cork, Knock and Shannon," EU Competition Commissioner Joaqun Almunia said in a statement.

"For them, the acquisition of Aer Lingus by Ryanair would have most likely led to higher fares."

In 2007 the Commission threw out a merger bid, saying it would stifle competition on Irish flights.

Ryanair slammed the decision as "political" and vowed to appeal. The carrier said it offered a "historic and unprecedented" remedies package and accused the Irish government's interests in Aer Lingus of thwarting a deal.

The Irish government holds a 25% stake in that low-cost carrier.

Ryanair, which currently holds 29.8% in Aer Lingus, said the latest offer had resolved all the Commission's competition concerns.

"Ryanair delivered a structural divestment remedy including, not one, but two upfront buyers, irrevocable and binding commitments from those two upfront buyers, divestiture of Aer Lingus' flights in each of the 46 crossover routes, together with offers of slot divestiture for an unlimited period of time on all other potential competition routes," it said.

In Ryanair's latest bid, regional carrier Flybe Group would take over 43 Aer Lingus routes.

The airline tried to convince the Commission that Flybe was a credible rival to Ryanair, despite having issued several profit warnings over the past two years.

Ryanair also proposed transferring all of Aer Lingus's routes between London Gatwick and Ireland to British Airways.

However, the Commission said the new offer failed to rid issues including that it would create an outright monopoly on 28 routes, while reducing competition on a further 11 routes.




Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular


These seven charts show exactly why you must own gold today

Covid-19 is accelerating many trends that were already in existence. The rising gold price is one such trend. These seven charts, says Dominic Frisby,…
3 Jun 2020
EU Economy

Why a stronger euro is good news for investors

The fragile state of the eurozone has for a long time brought the threat of deflation. But the ECB’s latest moves have dampened those fears. John Step…
5 Jun 2020

Disease, rioting and mass unemployment – so why are markets soaring?

Despite some pretty strong headwinds in the last year, America’s S&P 500 stock index is close to all-time highs. John Stepek explains why markets seem…
4 Jun 2020