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Aer Lingus Board Accepts IAG Takeover Bid, Ryanair & Parliament Unhappy

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New IAG bid, accepted by the Aer Lingus board, could result in more control over Heathrow gate space and market share of Western Europe.

After three bids in two months, International Consolidated Airlines Group (IAG), the parent company of British Airways and Iberia, could finally take control of Aer Lingus. The Guardian reports that the board of the Irish flag carrier is backing the latest attempt by IAG to purchase the airline.

The new bid values Aer Lingus at over $1.5 billion. Under the terms, IAG would purchase the shares of the airline at a price of just under $3 per share. If the sale closes, IAG anticipates running the airline as an independent brand, similarly to current operations of British Airways and Iberia.

The New York Times reports the deal is attractive to IAG because of the gate spots that Aer Lingus holds at London Heathrow Airport (LHR). As one of the primary tenants, British Airways operates over half of the daily departures and arrivals at London’s primary airport. Taking ownership of Aer Lingus could potentially allow British Airways to immediately benefit.

However, not everybody is thrilled about the board’s acceptance of the latest IAG bid on Aer Lingus. Reuters reports opposition parties in the Irish parliament are rallying against the government’s acceptance of the sale.

Meanwhile, Ryanair CEO Michael O’Leary still believes there is an opportunity for his airline to take ownership in Aer Lingus despite the block of previous attempts by the European Commission. Together, the Irish government and Ryanair control more than 50 percent of Aer Lingus.

“We think the best and proper outcome would be for Aer Lingus to form a group with Ryanair and be a stronger Irish airline,” said O’Leary at a briefing in London. “I do think that if IAG makes an approach the option would be open to us to make a fourth approach.”

[Photo: Aer Lingus Facebook]

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