It’s been three years of back and forth, appeal and counter-appeal, but Ryanair is finally selling its stake in Aer Lingus after a ‘final order’ from the competition authorities in June. That means British Airways owner IAG is approaching the final descent in its bid to buy the Irish flag carrier.
Ryanair’s board unanimously approved IAG’s €2.55-a-share bid for its 29.8% holding, signalling the beginning of the end of the saga that has seen the budget airline try to buy its older Irish rival three times since 2006, only to be thwarted at every turn by European and Irish authorities.
‘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,’ chief executive Michael O’Leary said, in a disappointingly swearword-free statement. ‘The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past 9 years.’
The low-cost carrier claimed its stake, built up in 2006-7, had been for sale since May 2012, despite its third bid being in June that year. In a last ditch attempt, O’Leary tried to challenge the UK Competition and Market Authority’s order it sell most of its share on human rights grounds (yes really) in February.
Seems like that didn’t go too well. So Ryanair was probably left with no choice but to sell up once the Irish Government accepted IAG’s bid for its 25.1% stake in Aer Lingus in May. And its investors were happy too: shares were up more than 2.5% to €12.42 in mid-morning trading.
‘We wish IAG well with their takeover of Aer Lingus,’ O’Leary said, rather sniffily, before some classic posturing. ‘When Ryanair first bid for Aer Lingus in late 2006, Ryanair (36m passengers) carried 4 times Aer Lingus traffic (9m). Today Ryanair (over 100m) carries more than 10 times Aer Lingus traffic (10m).’
But IAG may not have clear skies ahead just yet. Richard Branson, he of the many Virgin Atlantic-BA bustups, stuck his oar in last month. He claimed the deal damaged, you guessed it, competition. The competition authorities haven’t seemed too concerned just yet, though, so for now it seems like the IAG-Aer Lingus love-in is cleared for take off.