Ryanair To Sell Stake In Aer Lingus To IAG
British Airways parent company IAG is set to acquire Irish carrier Aer Lingus after Ryanair, the low-budget European airline that holds a near-30 percent stake in Aer Lingus, agreed to sell its shares.
IAG’s Chief Executive Officer, Willie Walsh, previously was the CEO of Aer Lingus and has long coveted Ireland’s national airline. Along with British Airways and IAG-owned Iberia, the acquisition will give the company an even stronger base and more options in the lucrative trans-Atlantic market.
IAG would not only gain more gates at London’s Heathrow Airport, but the company has said it will build up Dublin Airport into more of a trans-Atlantic hub.
Aer Lingus shareholders will meet on Thursday, July 16, to approve the deal, but it is expected to be a formality. IAG had said it wouldn’t pursue Aer Lingus unless it had the backing of the Irish government, which owns about 25 percent of the airline according to the Wall Street Journal.
The agreement is also expected to be approved by European Union officials.
Ryanair CEO Michael O'Leary said in a statement: "We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders. The price means that Ryanair will make a small profit on its investment in Aer Lingus over the past nine years."
That profit is expected to be about 400 million euros, or $440 million in U.S. currency.
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