Lufthansa Offers Competition Fixes In EC Takeover Probe

 The European Commission has extended its review of Lufthansa AG’s bid to take over the largely state-owned Austrian Airlines AG because the airlines have offered concessions to handle the regulator’s competition concerns over a deal that calls for Austria to take on a significant share of the airline’s debt.  When the EC initially opened its probe into this sale, it expressed doubts over 1) whether the carriers had proposed sufficient measures to keep the combination from distorting the market and harming competing airlines and 2) whether the price Lufthansa agreed to pay reflected the actual market price for the airline, worried that the sale process might not have been truly open, transparent and unconditional.  Lufthansa’s proposed $325 million deal to acquire Belgian rival Brussels Airlines has drawn similar scrutiny from EU regulators, who were worried that the deal would reduce competition, especially for passenger transport between Belgium and Germany and Belgium and Switzerland, creating a monopoly on three airline routes, and substantially reducing competition on a fourth route.

 

 

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