The European Commission (EC) said on Wednesday it had started an in-depth investigation into the takeover offer submitted by Irish airline Ryanair Holdings Plc (LON:RYA) for sector player Aer Lingus Group Plc (LON:AERL) on concerns that a deal could distort competition in the sector.
According to the regulator’s initial review of the transaction, a potential acquisition could harm competition on a broad number of European routes, the majority of which are served only by the two companies. The EC will come up with a conclusion regarding the potential effects of the proposed takeover by 14 January 2013.
In 2007, the watchdog blocked Ryanair’s bid for Aer Lingus over similar concerns. Two years later, the suitor notified the EC again on plans to acquire Aer Lingus but eventually withdrew its request. Compared with the 2007 case, the number of routes served by the two airlines has risen, the regulator noted.
Ryanair lodged its third offer to acquire Aer Lingus in June 2012, proposing to pay EUR694m (USD872m) for the company. Earlier in August, Aer Lingus recommended its shareholders again to turn down the bid, saying it undervalued the company and failed to serve the best interest of its shareholders.
