EU approval of IAG offer for Aer Lingus due next week - sources

IAG is due to get conditional EU approval for its takeover bid for Aer Lingus next week, according to informed sources.

The airline is set to get European Union antitrust approval for the bid, after improving concessions to ease competition worries, a person familiar with the matter said on Friday.

The concessions include giving up some airport slots in London and special prorate agreements with rivals,” the source said.

European Union approval for the deal is the only remaining hurdle to IAG’s plan to buy Aer Lingus and build a new transatlantic hub at Dublin airport.

Earlier today Ryanair said it will accept IAG's offer for its stake in Aer Lingus, paving the way for the British Airways-owner's €1.3 billion takeover of the Irish carrier to go ahead.

According to a statement issued on Friday, the board of Ryanair has voted unanimously to accept the IAG offer for its 29.8 per cent shareholding in Aer Lingus .

“We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders,” said chief executive Michael O’Leary.

IAG’s bid for Aer Lingus had been conditional on agreement from Europe’s biggest budget airline Ryanair, which holds a 30 per cent stake in Aer Lingus.

“Removing the uncertainty of Ryanair playing kingmaker should be taken positively for IAG shares today. Also positive for Ryanair stock given likelihood over cash return to shareholders of up to €400 million,” said Jefferies analyst Mark Irvine-Fortescue.

Shares in IAG climbed 2.8 per cent to 529 pence in early trade, making the company, which also owns the Iberia and Vueling airlines, one of the top risers on Britain’s bluechip index. Shares in Ryanair were 1.8 per cent higher. Aer Lingus’s were up 1.7 per cent.

Ryanair had fully written down the value of its Aer Lingus stake, built up during several failed takeover attempts of its own dating back to 2006. That means the proceeds, slightly more than Ryanair spent accumulating its stake, will boost its finances.

Minister for Transport Paschal Donohoe welcomed Ryanair’s decision. He said it marked an important development for Aer Lingus that would help secure its future

Meanwhile, Ryanair on Friday confirmed it will shift its Copenhagen staffing to Lithuania next week in response to planned industrial action by Danish trade unions over working conditions.

The unions want Ryanair’s staff in Copenhagen to work under a Danish collective agreement, offering what they say are more attractive conditions than those the airline sets for its workers.

Ryanair, which deployed one aircraft in Copenhagen in March to fly to cities such as London and Cologne, has said previously that its pilots and cabin crew in Denmark enjoy high pay and job security.

The airline has said it would continue to fly out of Copenhagen, but with the aircraft and staff based in Lithuania.

Reuters