Aer Lingus say the bid remains conditional on, amongst other things, confirmatory due diligence, the recommendation of the Board of Aer Lingus and the receipt of irrevocable commitments from Ryanair and the Minister for Finance of Ireland to accept the offer.
The key stumbling block to IAG acquiring Aer Lingus will be the Irish Government which holds a 25.1% stake in the airline. The Irish Government will need to be satisfied that links between London Heathrow and Ireland will be maintained and Aer Lingus will not loose its Heathrow slot-holdings.
Here are some thoughts we gathered before Christmas on what may happen of IAG is successful in acquiring Aer Lingus.
Aer Lingus has issued a statement on Tuesday recommending the bid. International Airlines Group has also statement confirming that if the acquisition goes ahead Aer Lingus will maintain its own brand and join the Oneworld alliance and transatlantic joint-venture with BA and American Airlines. IAG will also seek to assuage concerns about the maintenance of links between London Heathrow and Cork and Shannon by entering into discussions with the Irish Government.
When International Airlines Group (“IAG”) was formed a little under four years ago from the merger of British Airways and Iberia, it stated an ambition to acquire up to 12 additional airlines.
So far it has acquired two. These are bmi and Vueling. bmi has been integrated into British Airways (bmibaby was closed and bmi regional was sold). Vueling continues to operate on a standalone basis.
Today we learned of an approach by IAG to Aer Lingus. IAG confirmed in a statement to the Stock Exchange that it submitted a proposal to make an offer for Aer Lingus, which has been rejected by the Board of Aer Lingus.
Aer Lingus also formally acknowledged the approach, stating that the initial approach was preliminary, highly conditional and non-binding. Furthermore, in their view it under-valued the company.