Ryanair the no-frills carrier, said this morning it has completed the acquisition of Buzz for €20.1 million, nearly €4 million less than the original agreed price.
Ryanair confirmed the agreed price was reduced as a result of a number of issues which arose during the due diligence process.
Ryanair completed the purchase despite not having regulator approval. It does not legally need the Office of Fair Trading's approval to go ahead with the takeover. However, if the Competition Commission concludes the deal was uncompetitive, Ryanair may then be forced to sell all or parts of Buzz.
Under the deal Ryanair will receive 10 Buzz aircraft, up to 130 employees, and some airport facilities.
Former Buzz owner, KLM, will retain up to 470 of its Buzz staff, as well as its headquarters in Stansted, the assets and liabilities of the legal entity KLM UK Ltd which was trading as Buzz up to March 31st 2003.
Ryanair said it has formed a new subsidiary called Buzz Stansted Ltd, which holds UK AOC approval, and will start flying on May 1st.
It is intended that the company will operate its aircraft on a subservice basis flying directly for Ryanair, primarily operating on a network of 12 routes, which were formerly operated by KLM UK/Buzz, Ryanair said.
The new chief executive will be Mr John Osborne - former director of operations for Ryanair and former chief executive of GB Airways and Virgin Express.
But Ryanair warned that the deal has not yet been given the green light by UK regulatory authorities - though Ireland and Germany have given approval - and said it has advised the UK Office of Fair Trading of its intention tocomplete the acquisition without waiting for regulatory approval in advance.
"We will continue over the coming two weeks to liaise closely with both the CAA (Civil Aviation Authority) and the OFT and look forward to obtaining their approval in due course of the purchase and rescue of the core operation of Buzz and its successful re-launch from May 1st onwards," Ryanair chief executive Mr Michael O'Leary said.
AFP