Court of Appeal Ruling on Ryanair/Aer Lingus Merger
The Court of Appeal has upheld an earlier CAT ruling that that OFT could scrutinise Ryanair’s minority shareholding in Aer Lingus.
Back in 2006 Ryanair built up a 30% stake in rival Irish airline Aer Lingus and then went on to make a public bid for the rest. The EU Commission scrutinised the deal and said Ryanair could not own Aer lIngus: the bid was blocked. But the Commission did not require Ryanair to sell down its 30% stake.
Ryanair appealed this decision to the General Court in Luxembourg saying it should have been allowed. Aer lingus appealed saying the Commission should have required the 30% to be sold.
In the meantime, Aer Lingus turned to the OFT claiming that even if the EU Commission could not require sale of the 30%, under UK merger control law, it gave “material influence” to Ryanair and should be scrutinised by the UK authorities.
The OFT did not take any steps until the appeals in Luxembourg were completed some 3 years later. At that point Ryanair said the OFT was out of time. The OFT disputed Ryanair’s challenge saying it could not act because to do so would risk cutting across the “one-stop-shop” merger control regime that operates at an EU level. The Court of Appeal has upheld the OFT’s approach and concluded that the “duty of sincere cooperation” between the UK and EU meant that it was right to hold off its scrutiny until the EU court process was at an end.
Daniel Beard QC and Julian Gregory acted for the OFT.
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