Dublin snubs Ryanair bid for Aer Lingus
23 Jan 2009
The Irish government snubbed Ryanair's bid for Aer Lingus, effectively killing the low-cost airline's attempt to take over its smaller rival.
The government, which owns 25 per cent of Aer Lingus, said Ryanair's €1.40 a share all-cash offer, which valued the airline at €748m (£701m), "greatly undervalues Aer Lingus and a merger on the basis proposed would be likely to have a significant negative impact on competition in the market."
Noel Dempsey, transport minister, said: "Because we live on an island, Irish consumers depend heavily on air transport. A monopoly in this area would not be in the best interests of Irish consumers.
"The offer by Ryanair did not include any proposed remedies for the virtual monopoly that would result if the offer was accepted."
Michael O'Leary, Ryanair chief executive, conceded the offer was dead. " It means our offer won't be successful since our 90 per cent acceptance condition can't be satisfied. Sadly it means the government won't receive €200m, and there won't be a 1,000 new jobs created in Aer Lingus over the next five years," he said.
An earlier unsuccessful bid in October 2006, priced at €2.80 a share, was rejected by shareholders and deemed anticompetitive by the European Commission. The EC ruled the merger would "have harmed consumers by removing this competition and creating a monopoly or a dominant position on 35 routes operated by both parties."
