Ryanair, Aer Lingus Ruling Next Week

February 21, 2013

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EU regulators will decide next week on Ryanair's third attempt to take over Aer Lingus, the EU's antitrust chief said on Thursday, a decision that Europe's biggest no-frills airline has already said will be negative.

Ryanair said last week the European Commission, which oversees competition in the 27 EU member states, would block its latest takeover bid for Aer Lingus. Ryanair said such a move was political and one it would challenge in court.

The Commission will announce its decision next week, EU Competition Commissioner Joaquin Almunia told reporters

"The decision is on February 27," he told reporters, without giving details of the outcome.

A veto would be Almunia's fourth rejection of a proposed merger in three years. Last month he blocked plans by package delivery company UPS to acquire Dutch rival TNT Express.

Ryanair had offered to pay EUR€100 million (USD$132 million), transfer nine planes and cede 43 routes to strengthen British rival Flybe in a bid to secure EU regulatory approval.

The proposal included Flybe setting up an Irish airline, with Ryanair providing forward sales cash and liabilities worth around EUR€50 million.

A source close to the deal said Ryanair was also willing to give up Aer Lingus' routes at London's Gatwick Airport to British Airways.

The EU competition authority blocked Ryanair's first takeover bid in 2007. The airline abandoned a second attempt in 2009.

The Irish government, which holds a 25 percent stake in Aer Lingus, opposes Ryanair's bid.