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Etihad-backed Aer Lingus spends $53m fighting Ryanair

Ryanair already owns 29.8 percent of Aer Lingus.
NEWS, Aviation

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By: Shane McGinley

Aer Lingus, the Irish airline in which Abu Dhabi’s Etihad Airways holds a nearly 3 percent stake, has spent €40m ($53m) fighting an ongoing takeover bid by rival carrier Ryanair, a Dublin court has been told.

The legal battle concerns Ryanair’s €694m takeover bid of Aer Lingus in July 2012, its third attempt by the low-cost carrier. Ryanair owns 29.8 percent of Aer Lingus and is its largest shareholder and the European Commission has blocked previous takeover bids, declaring that the proposed merger would harm consumer choice.

Aer Lingus has launched a new legal bid through the Irish Takeover Panel to try and prevent any further takeover attempts by Ryanair and revealed it has spent €40m doing so.

Abu Dhabi’s Etihad currently owns 2.987 percent of Aer Lingus and has suggested it could look to acquire more of the airline as part of its equity alliance strategy.

Earlier this month, International Airlines Group (IAG) CEO Willie Walsh said he believed Ryanair would be a better owner for Aer Lingus, rather than Etihad.

"If somebody thought Etihad is a better shareholder than Ryanair, I'd love for them to explain why and how that would be the case,” Walsh, whose IAG is the parent company of both British Airways and Iberia Airways, told the Irish Independent newspaper.

"I see it as quite the opposite. Ryanair wants Ireland and, whatever you say about Michael O'Leary, he's proud to be an Irishman, lives here and has created one of the most valuable airlines in the world. How is that less attractive to Ireland than Abu Dhabi”

Walsh added that IAG was not interested in acquiring Aer Lingus, in which the Irish government is the second largest shareholder with a 25.1 percent stake.

European Union competition rules stipulate that companies outside of the bloc are not permitted to buy up more than 49 percent of any European airline, which Walsh claimed would mean Etihad would always be competing with Aer Lingus regardless of its stake.

Etihad currently owns stake in several other major international airlines, including airberlin and Air Seychelles, as well as a myriad of codeshares with foreign operators.

 

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