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Ryanair's Aer Lingus bid faces EU inquiry | Ryanair's Aer Lingus bid faces EU inquiry |
(about 3 hours later) | |
Budget airline Ryanair's latest attempt to take over its Irish rival Aer Lingus is to be investigated by the European Commission over competition worries. | |
In June, Ryanair proposed a cash offer for its rival valuing it at 694m euros ($883m; £561m). | |
href="http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/921&format=HTML&aged=0&language=EN&guiLanguage=en" >But the commission said that its initial findings "indicated potential competition concerns". | |
A previous attempt by Ryanair to buy Aer Lingus was blocked by the commission in 2007. | |
Route overlap | |
In a statement, the commission said: "On a large number of European routes, mainly out of Ireland, the two airlines are each other's closest competitors and barriers to entry appear to be high. | |
"Many of these routes are currently only served by the two airlines. | |
"The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes," it said. | "The takeover could therefore lead to the elimination of actual and potential competition on a large number of these routes," it said. |
The commission said it would decide by 14 January whether it approved of the deal or not. | The commission said it would decide by 14 January whether it approved of the deal or not. |
In a statement, Ryanair - which already owns 30% of Aer Lingus - said that under the terms of its proposal, the commission's investigation meant that its offer would lapse. | |
However, it said it intended to re-bid for Aer Lingus if the commission gave the deal the go-ahead. | |
Aer Lingus has said on numerous occasions that its shareholders should reject the Ryanair bid. | Aer Lingus has said on numerous occasions that its shareholders should reject the Ryanair bid. |
Following the commission's announcement, Aer Lingus said the airline was much stronger than when Ryanair first attempted to buy it. | |
It also noted that the number of routes into and out of Ireland on which it and Ryanair competed had "sharply increased". | |
"The reasons for prohibition are therefore even stronger than before," Aer Lingus said. |
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