IAG offers more Heathrow slots – 14 pairs – in bid for BMI
IAG has offered extra concessions to try to get regulatory approval to buy BMI, currently making a loss, and owned by Lufthansa. IAG has now offered to increase the number of take off and landing slots at Heathrow that it will relinquish from 10 to 14. Losing more than the 14 pairs of slots IAG is now proposing risked undermining the case for buying BMI, bearing in mind that BMI is loss-making (made a loss of €199m in 2011). Joaquín Almunia, EU competition commissioner, must decide by March 30 whether to approve IAG’s purchase under Brussels’ phase one inquiry process. Virgin Atlantic, which failed with its bid for BMI, wants the EU to prevent the IAG deal. If IAG bought BMI, it would increase its share of Heathrow slots from about 45% to about 53%.
March 22, 2012 (Financial Times)
IAG offers more slots in bid for BMI
By Andrew Parker in London and Alex Barker in Brussels
International Airlines Group has offered a limited number of extra concessions to try to secure regulatory approval for its acquisition of BMI British Midland,Lufthansa’s lossmaking UK subsidiary.
IAG, parent of British Airways and Iberia, has sweetened its offer to the European Commission by increasing the number of valuable take-off and landing slots at London’s Heathrow airport that it would relinquish under the proposed deal from 10 to 14.
In a high-stakes move, Lufthansa and IAG are increasing the pressure on the Commission to grant a quick approval of the deal by warning that BMI could face closure if Brussels proceeds with an in-depth investigation of the transaction that could last months.
and the story continues ….
see full FT story at http://www.ft.com/cms/s/0/5b22a660-7442-11e1-9951-00144feab49a.html#axzz1pr3qnh3Q
see also
March 12, 2012 (Financial Times)
IAG faces lengthy BMI takeover probe
By Alex Barker in Brussels and Andrew Parker in London
International Airlines Group faces a lengthy competition investigation into its contentious takeover of BMI British Midland after being told by the European Commission that its proposed deal concessions are likely to be rejected.
IAG, formed through the merger of British Airways and Spain’s Iberia, has offered to relinquish some take-off and landing slots at Heathrow airport in order to secure quick regulatory approval for its planned purchase of BMI, Lufthansa’s lossmaking UK subsidiary.
However, IAG’s lawyers have been informed that the company’s proposals are unlikely to address Brussels’ full range of competition concerns, increasing the prospect of a longer and more in-depth investigation.
and the story continues ….
see full FT story at http://www.ft.com/cms/s/0/0f7fe1f8-6c6f-11e1-b00f-00144feab49a.html#axzz1pr3qnh3Q
IAG ‘sweetens’ BMI offer to speed up deal
Reports this morning suggested the British Airways and Iberia parent has sweetened its offer to the European Commission by raising the number of valuable take off and landing slots it would hand over from 10 to 14.
Lufthansa and IAG are increasing the pressure on the commission to grant a quick approval of the deal by warning that BMI could face closure if Brussels proceeds with an in-depth investigation of the transaction that could last months.
EU competition commissioner Joaquín Almunia must decide by March 30 whether to approve IAG’s takeover under Brussels’ phase one inquiry process.
IAG would increase its share of Heathrow slots from 44.8% to 53.5% by acquiring BMI for £172.5 million.
The BA parent would secure 56 pairs of daily slots held by BMI in the deal. It initially proposed relinquishing 10 pairs of slots to secure approval, believed to cover routes to Aberdeen, Cairo, Edinburgh and Riyadh.
But the commission said the concessions were unlikely to be adequate.
Giving up any more than the 14 pairs of slots IAG is now proposing risked undermining the case for buying BMI, given that it was lossmaking, the Financial Times reported, quoting a source “familiar with the group”.
Failed BMI bidder Virgin Atlantic has been calling on regulators to block the IAG deal or extract big concessions on slots.
http://www.travelweekly.co.uk/Articles/2012/03/23/39965/iag+sweetens+bmi+offer+to+speed+up+deal.html