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Aer Lingus Takeover? Ryanair Rebuffed
The Competition and Markets Authority (CMA) has rejected an attempt by Ryanair to block a ruling forcing the airline to reduce its stake in Aer Lingus.
Two years ago, the CMA ruled that Ryanair must pare down its 29.8 per cent Aer Lingus stake to at least 5 per cent on the grounds that the holding could prevent a takeover. However, in January this year, International Airlines Group (owner of British Airways) launched a €1.4bn bid for Aer Lingus – and Michael O’Leary argues that IAG’s offer effectively invalidates the CMA’s conclusions.
However, the CMA this morning announced that it would not reverse its decision.
“Our view is that the circumstances around International Airlines Group’s proposed bid are consistent with the findings in our report,” commented Simon Polito, chair of the CMA panel on the Ryanair stake.
“Without any action to reduce its shareholding, Ryanair would remain a significant hurdle to any merger because it has an incentive as a competitor of Aer Lingus and, by its shareholding, the ability to hinder Aer Lingus from implementing its own commercial strategy.”
The board of Aer Lingus will recommend International Airlines Group’s takeover bid, which values the Irish airline at €2.50 a share. However, the Irish government owns a 25 per cent stake in Aer Lingus, and has made it clear that it will reject the offer on its current terms.