EU would start from scratch on bid by Ryanair

ANY EXAMINATION of Ryanair’s new bid for Aer Lingus by EU competition commissioner Joaquín Almunia would start from scratch with no reference to the rejection of Ryanair’s first bid, the European Commission has indicated.

“The previous decisions of the commission are well known but of course if there is a notification we will examine the notification as it is in the current circumstances,” Mr Almunia’s spokesman told reporters.

Competition experts struggle to recall any previous case in which a merger rejected by the commission on competition grounds was later accepted by it. In 2003, however, the commission cleared the purchase of French packaging machine firm Sidel by Swiss-Swedish company Tetra Laval after a European court annulled its earlier rejection of the deal.

Ryanair argues that conditions in the airline industry have changed since its first, unsuccessful bid in 2006.

The Government is obliged under the EU-IMF bailout to sell its stake in Aer Lingus, but this would not feature in any competition investigation.

It is understood that the competition questions raised by the bid would be viewed in isolation from and supersede the requirements of the EU-IMF troika, of which the commission is a member.

Thus the emergence of an opportunity for the Government to sell its shares to Ryanair would be very unlikely to be cited as a reason for the commission to allow a deal to go ahead in circumstances where it might otherwise reject it.

This is because the legal basis for any commission examination would be confined to narrow competition issues. There are no legal grounds for the commission to deploy competition policy for any other purpose, be it political or financial.

Mr Almunia’s spokesman noted that the authorities had not received any formal notification of the Ryanair bid when asked yesterday whether the commission had any response to it.

However, it remains open to Ryanair to seek an informal dialogue with commission officials before making its formal notification of the bid.

“If this deal is confirmed and if it is notified to the commission, then the commission will, of course, examine it,” the spokesman said. “I’m sure that Ryanair will want to get in touch with us even beforehand.”

The spokesman had no further comment when asked whether the requirements of the troika would change parameters of any competition examination. “As there is no notification at this point, there is no investigation by the commission into this matter,” he said.

The first phase of a competition examination of a proposed transaction takes 25 working days.