Aer Lingus Calls on EU Competition Veterans to Halt Ryanair Takeover

Strategic Insights -

Aer Lingus is seeking assistance from two former EU competition commissioners, Mario Monti and Karel Van Miert, to counter a €1.48bn takeover bid by rival Irish airline Ryanair. The experts, who have experience in dealing with airline mergers, will provide advice on Aer Lingus' submissions to the EU commission. Meanwhile, opposition to the takeover is growing, with a pension fund linked to Aer Lingus pilots buying a 2.1% stake in the airline and the Irish government retaining a 28% stake to block any attempt to delist the company.

Key Takeaways:

  • Aer Lingus has recruited former EU competition commissioners Mario Monti and Karel Van Miert to advise on the airline's submissions to the EU commission.
  • The two experts have experience in dealing with airline mergers, with Mr. Van Miert previously imposing tough conditions on British Airways' proposed merger with American Airlines.
  • Aer Lingus' chairman, Michael O'Leary, has a low opinion of EU bureaucrats, referring to them as part of "an evil empire".
  • A pension fund linked to Aer Lingus pilots has bought a 2.1% stake in the airline, viewed as a move to oppose the takeover.
  • Over 40% of Aer Lingus shares are in the hands of those believed to be against the takeover, including the Irish government, employees, and unions.
  • Ryanair will need to raise its €2.80-a-share offer to secure the takeover, according to analyst Mike Powell at Dresdner Kleinwort.
  • Strategically, Ryanair's bid is a disaster, according to Powell, who notes that the airline's management will need all their determination to push the takeover through.

Statistics:

  • 2.1% - the stake bought by the pension fund linked to Aer Lingus pilots in the airline.
  • 40% - the percentage of Aer Lingus shares in the hands of those believed to be against the takeover.
  • 28% - the stake retained by the Irish government in Aer Lingus.
  • 25.1% - the minimum required by the Irish government to block any attempt to delist Aer Lingus.
  • €1.48bn - the value of Ryanair's takeover bid for Aer Lingus.
  • €2.80 - the offer price per share made by Ryanair.
  • 19.2% - the stake held by Ryanair in Aer Lingus.

Sources:

  • Aer Lingus
  • Ryanair
  • Dresdner Kleinwort (report by analyst Mike Powell)
  • "The Irish Times"
  • "News of the men's role adds additional spice to the euro1.48bn (pounds 1bn) takeover battle" (exact phrase from the original article)