On 15 June 2012, the OFT announced its decision to refer the 2006 completed acquisition by Ryanair of a minority stake of 29.8% in Aer Lingus to the Competition Commission. The OFT is concerned that Ryanair’s stake could give it the ability to exercise material influence over Aer Lingus’ commercial policy and there is a realistic chance that Ryanair’s stake resulted in or will result in a substantial lessening of competition on a number of Ryanair and Aer Lingus routes between the UK and Ireland. As a result, the OFT has referred the issue to the Competition Commission for a more detailed investigation. The European Commission initially investigated the public bid and prohibited it in 2007, but did not have the ability to order divestiture of Ryanair’s shareholding below the level of “decisive influence”, which is the threshold for the European Commission’s jurisdiction under the EU merger regime. Decisive influence requires a more significant level of shareholding and influence than material influence, which triggers the OFT’s jurisdiction under the UK merger regime. As a result, the OFT subsequently commenced its UK merger investigation which, after being suspended twice, has resulted in the reference to the Competition Commission. Read more.
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Minority shareholdings and merger control: the Office of Fair Trading refers Ryanair’s minority stake in Aer Lingus to Competition Commission
- Mayer Brown LLP
- Gillian Sproul
- United Kingdom
- June 21 2012
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Philip I. Weis
Senior Corporate Counsel
Pfizer