EU to outline objections to Ryanair takeover bid
The EU is to serve formal objections against Ryanair’s third proposed takeover of Aer Lingus, after Europe’s largest low-cost carrier by revenues failed to offer concessions that address all Brussels’s competition concerns about the deal.
The European Commission has made it clear it will reject what Michael O’Leary, Ryanair’s chief executive, said was a “radical” and “unprecedented” remedies package to secure regulatory approval.
According to people involved in the talks, Ryanair has been told the package falls short of what is required to eliminate competition concerns on all routes where the merged Irish carrier would enjoy a dominant position.
Although Ryanair said last week it had found airlines willing to provide competition on routes that would otherwise be dominated by the merged Irish carrier, the commission concluded the offer was so unsatisfactory it has not asked rival airlines to comment. “We continue to respect the process by declining to comment on rumour and speculation,” Ryanair said last night.
The issuance of a so-called “statement of objections” by the commission will take Ryanair one step closer to its bid being blocked for the second time. In 2007, the commission prohibited Ryanair’s first tilt at Aer Lingus on the grounds it would harm consumers by creating a near-monopoly. Ryanair can improve its offer to the commission at any time. After formal objections are issued, it can challenge findings. People involved with the talks insist the commission is keeping an open mind and ensuring Ryanair has every chance to prove the bid for Aer Lingus can pass the competition test.
The provisional deadline for a commission decision is early February. It is rare for the commission to prohibit mergers, and it has never approved a resubmitted takeover.
Michael O’Leary, Ryanair’s chief executive, said he had received “no feedback” from the commission but added he believed Brussels would find it “very difficult” to reject the proposed remedies package.
He said there were six airlines willing to provide competition on routes where Ryanair and Aer Lingus overlap. British Airways and Flybe are believed to be considering operating services where the Irish carriers overlap.
Willie Walsh, chief executive of International Airlines Group, the parent of British Airways, confirmed the company had held discussions with Mr O’Leary. – Copyright The Financial Times Limited 2012