The European Commission said yesterday that it would decide by Aug 29 whether to clear the deal, the third offer by Michael O’Leary for the airline.
Ryanair, the largest shareholder in Aer Lingus with a 30% holding, notified the commission of its bid on Tuesday. The budget carrier has offered €1.30 a share for the former national flag carrier. Shares in Aer Lingus on the Irish stock exchange closed at €1.05 last night.
Aer Lingus, in which the Government holds a 25% stake, has urged shareholders to reject Ryanair’s offer and said the commission was likely to block it.
Both Aer Lingus and Ryanair declined to comment yesterday.
Ryanair is likely to have a tough time with EU regulators, said Goetz Drauz, a partner at law firm Wilson Sonsini. “It will be difficult to convince the commission. The commission has a destination-by-destination approach, which means a high combined market share is not acceptable. This is likely to go into phase two,” Mr Drauz said, referring to a lengthy review.
“Unless Ryanair finds convincing upfront buyers for its slots, it may not have a chance.”
The combined carrier formed by the proposed merger would control 80% of traffic between Britain and Ireland.
The EU executive blocked Ryanair’s 2007 attempted takeover of Aer Lingus, saying the combined group would monopolise or dominate 35 routes, leading to consumers paying more. It said Ryanair had not offered to give up enough airport slots to allay its concerns.
Ryanair dropped its second offer in 2009.
Britain’s Competition Commission is now investigating Ryanair’s minority stake in Aer Lingus, while the Office of Fair Trading in Britain has said that the holding threatens competition in the sector.
Another shareholder in Aer Lingus is Abu Dhabi’s Etihad, with a 3% holding.