Shareholders have given their approval for Irish airline Aer Lingus to be taken over by International Airline Group (IAG) in a €1.3 billion (£940 million) deal. The deal values Aer Lingus shares at around €2.50 each.
The news comes shortly after the United States Department of Justice announced that its review had been “satisfactorily concluded.” Since IAG’s purchase of Aer Lingus will help to bolster its transatlantic network – the company wants to create a transatlantic hub at Dublin airport - regulators in both the US and Europe have been assessing the deal.
European competition concerns
On Tuesday (July 14th), competition authorities in Europe gave approval that was “conditional upon commitments offered by the parties”. The commission had expressed concerns that the takeover would lead to insufficient competition. It claimed that the deal would have stopped “Aer Lingus from continuing to provide traffic to the long-haul flights of competing airlines on several routes”.
In order to alleviate these issues, IAG, which also owns BA and Iberia, had to agree to dropping five slots at Gatwick Airport. They also promised that other airlines could apply for seats on Aer LIngus’s short-haul services for transfer traffic – specifically those from the UK, Ireland and the Netherlands.
Shareholders in Aer Lingus have also agreed to promises that IAG made to the Irish government in order to gain its approval for the deal. IAG had agreed to reserve Aer Lingus’s 23 take-off and landing slots at Heathrow for Irish routes for seven years.
Ryanair has attempted to buy Aer Lingus three times since the carrier floated on the stock market in 2006. The budget airline currently has a 29.8 per cent stake in Aer Lingus, making it the biggest shareholder. On Friday, the company revealed that it would back the IAG takeover.
The deal also paves the way for the Irish government to sell its 25 per cent stake in the company, reports the BBC.
This afternoon, stocks in IAG were up 7.56 per cent to 560.56.
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