Aer Lingus: Ireland agrees to sell stake to BA owners
Board of Aer Lingus recommends IAG's €1.36bn takeover bid after receiving assurances on jobs and connectivity
The Irish government has agreed to sell its 25 per cent stake in national carrier Aer Lingus to International Airlines Group (IAG), the company behind British Airways, paving the way for a €1.36bn (£961m) takeover of the airline.
Transport minister Paschal Donohoe confirmed Dublin's position after a cabinet meeting on Tuesday. "Following detailed consideration of... all of the issues surrounding a potential disposal of the state's shareholding in Aer Lingus, the government has decided that it will support IAG's proposal," he said.
Prior to the sale being approved, the Irish government insisted that IAG provide a number of assurances relating to job security for airline staff, guarantees on maintaining flights between London Heathrow and Dublin and transatlantic flights.
The Aer Lingus board backed the IAG takeover in January, but the support of Dublin was "critical for the deal to progress", reports The Guardian.
The proposed deal values the airline at €2.55-a-share, but not all the carrier's shareholders have agreed to sell. Rival airline Ryanair owns 29.8 per cent of the carrier and says it has yet to be approached by IAG.
A spokesperson said: "The board of Ryanair has yet to receive any offer, and will consider any offer on its merits, if and when an offer is made."
The sale has been a "hot topic" in Dublin where Irish politicians and trade unionists have "warned about future implications for jobs and connectivity", reports Sky News.
To assuage concerns, IAG pledged to maintain Aer Lingus' head office in Dublin and to maintain the number of flights between London Heathrow and Dublin, Cork and Shannon for at least seven years.
European competition authorities indicated yesterday that Brussels would not oppose the bid.
IAG's chief executive Willie Walsh has "spent months brokering the complex deal", the Daily Telegraph reports.
"Acquiring Aer Lingus would add a fourth competitive, cost-effective airline to IAG, enabling us to develop our network using Dublin as a hub between the UK, continental Europe and North America, generating additional financial value for our shareholders," Walsh said.
Chairman of Aer Lingus Colm Barrington said that the deal was a "compelling transaction for Aer Lingus".