On August 28, 2013, the UK Competition Commission issued its final report confirming its provisional finding that Ryanair’s minority shareholding in Aer Lingus has led or may be expected to lead to a substantial lessening of competition on routes between Great Britain and Ireland. Accordingly, it has required Ryanair to sell down its 29.8% stake to 5%.
The CC concluded that Ryanair would have the incentive to weaken Aer Lingus’s effectiveness as a competitor against Ryanair, and that this incentive would not exist for a shareholder which does not compete with Aer Lingus. The CC’s in-depth investigation considered various ways in which Ryanair’s minority shareholding could serve to weaken Aer Lingus’s effectiveness as a competitor. The CC found that Ryanair’s minority shareholding may impede Aer Lingus from participating in airline consolidation, thereby achieving increased scale and lower unit costs; that Ryanair was able to block special resolutions and could in certain circumstances defeat ordinary resolutions at a general meeting, thereby restricting Aer Lingus’ commercial freedom; and that the shareholding increased the likelihood of further bids by Ryanair for Aer Lingus, disrupting Aer Lingus’ commercial strategy.
The CC concluded that a sell-down to 5% would be effective in remedying the SLC.
Aer Lingus supported action by the CC to reduce Ryanair’s stake in Aer Lingus. A CRA team comprising Cristina Caffarra, Pierre Régibeau, Ugur Akgün, and Andy Parkinson advised Aer Lingus throughout the process.