Ryanair told to cut stake in Aer Lingus but airline will appeal decision
Budget airline Ryanair has been told to slash its 30% stake in Irish carrier Aer Lingus, to potentially facilitate IAG’s takeover of the airline.
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IAG, which owns British Airways and Iberia, made a €1.36bn for the Aer Lingus, although it needs support from Ryanair to complete the takeover.
On Thursday, in its final ruling on the issue, the Competition and Markets Authority (CMA) said it was against fair competition to allow one airline to decide whether an offer for one of its main rivals would succeed or fail.
"We need to ensure that, whatever happens in relation to this particular transaction, Ryanair's ability to hold sway over Aer Lingus is removed," the watchdog said in a statement.
“We will liaise closely with other authorities to ensure that our requirement for Ryanair to reduce its stake works effectively alongside shareholders' consideration of the IAG bid and assessment of the bid by the European Commission."
In April, the CMA said Ryanair represented a major stumbling block to any merger, after the Dublin-based airline had asked the watchdog to review an original ruling from 2013 that stated it must bring its stake in Aer Lingus to below 5%.
Earlier this year, the Irish government said it would sell its 25% stake in Aer Lingus to IAG, while Ryanair said it would consider the bid upon receiving a formal offer document.
In a statement released on Thursday, the budget carrier announced it will appeal the CMA’s “ridiculous” ruling.
“Today’s CMA decision rejecting Ryanair’s request to review its order to divest Ryanair’s 29.8% minority stake in Aer Lingus is manifestly wrong and flies in the face of the current IAG offer for Aer Lingus,” the company said.
Ryanair added it will appeal the decision to the Competition Appeal Tribunal, “given that it is factually unsustainable and legally flawed as the IAG offer for Aer Lingus proceeds”.
As of 09:45 on Thursday, Ryanair shares were up 0.68% to €11.82.
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