Court prohibits Ryanair bid for Aer Lingus

Gman496

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The European Court of Justice has ruled that Ryanair's takeover bid of Aer Lingus should be blocked.


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Aer Lingus Ryanair made a takeover bid in 2007


However, the court ruled that Ryanair can hold on to its 29.8% stake in Aer Lingus.

The court was ruling on the 2007 takeover bid by Ryanair of Aer Lingus.

Ryanair acquired a 19% stake in Aer Lingus after it was privatised in 2006.

It then notified the European Commission that it was seeking a takeover.

By the end of 2006, Ryanair had bought 25% of Aer Lingus shares.

However, in June 2007 the Commission declared a takeover bid incompatible with EU competition rules.

Ryanair challenged that decision and in the meantime brought its shareholding up to 29.8%.

No immediate plans for third offer: O'Leary

Ryanair said it is studying the judgment, which runs to 125 pages, but it welcomed the decision that it be allowed keep its shares in Aer Lingus.

Chief Executive Michael O'Leary said the ruling will not prevent Ryanair making another offer for Aer Lingus, but there are no immediate plans for a third offer.

Mr O'Leary said: 'We note the Court's decision on our appeal against the EU Commission's ruling on our 2006 offer for Aer Lingus.

'This will not prevent Ryanair making a future offer for Aer Lingus, but obviously any such offer will have to take account of the court's detailed ruling.

'Ryanair has no immediate plans to make a third offer for Aer Lingus, which in any event would be unlikely to succeed unless the Irish Government decides to sell its 25% stake.

'We continue to believe that the long term financial viability of Aer Lingus can only be secured as part of one strong Irish airline group.'

In a statement, Aer Lingus welcomed the Court's decision.

'Today's rejection by the European Court of Ryanair's appeal confirms that a takeover of Aer Lingus by Ryanair would harm consumers and lead to higher prices on Irish routes,' Aer Lingus Chairman Colm Barrington said.

However, he expressed disappointment that Ryanair was not ordered to sell off its stake in the airline.

He said: 'It is regrettable that the court has not taken this opportunity to take the further step necessary to address the anti-competitive effects of Ryanair's minority shareholding in Aer Lingus which is contrary to the interests of the majority of our shareholders.'
 
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