Ryanair Holdings has reportedly withdrawn its offer to buy Aer Lingus after EU regulators launched a probe into its hostile bid for the Irish carrier. (12/22/2006)
As per the information available, Ryanair shared that its $1.9 billion offer was now void. It said it would only make another offer if the European Commission approved the proposed takeover.
The airline expressed its disappointment at the European Commission’s decision to refer its offer for Aer Lingus to a Phase II investigation. “This further investigation could take between three to five months, and Ryanair regrets this unnecessary delay and any uncertainty it may cause for Aer Lingus shareholders and consumers who want access to lower fares and better service,” stated the airline.
Ryanair’s chief executive officer Michael O’Leary said: “We are disappointed with the delay in the European Commission’s approval of Ryanair’s offer for Aer Lingus. This could and should have been decided in Phase I.”
The airline felt the delay is unnecessary. One of the reasons for the same cited by O’Leary was: “ Ryanair does not accept the Commission’s claim that it did not have sufficient time to consider our proposed remedies.”
“This decision to refer the Ryanair-Aer Lingus takeover to a Phase II investigation flies in the face of the European Commission’s stated policy of encouraging consolidation amongst European airlines,” he added. “The Commission’s decision in this case is inconsistent given that the Air France-KLM merger was approved in Phase I while offering up just over 120 slots at its main airports. By contrast, Ryanair offered to surrender over four times more slots (over 500) of the combined Ryanair/Aer Lingus slots, including valuable slots at London Heathrow, in order to secure Phase I approval, yet the Commission has failed to follow its own consolidation policy or the precedents set in the approved Air France-KLM merger.”
He added that the Commission appears to be applying different and totally inconsistent principles to the Ryanair-Aer Lingus deal than it applied to the much larger Air France-KLM deal, which was waved through with little difficulty in Phase I.
“Given Ryanair’s commitment to reduce Aer Lingus’ short-haul fares by almost 10% over four years, there is no basis for the Commission’s claim that the proposed acquisition “could give rise to higher fares than would be likely if the two carriers remained separate”. The fact that Aer Lingus’ fares will fall under Ryanair’s ownership would make this consolidation far more consumer friendly than the phase I approved Air France-KLM merger which has resulted in average fares and yields rising significantly in the eighteen months since that merger,” he said.
O’Leary added Ryanair remains committed to acquiring Aer Lingus and will continue this process to – what we believe will be - the successful conclusion of this Phase II investigation.
