LONDON—International Consolidated Airlines Groupis a step closer
to taking over smaller Irish rival Aer Lingus Group PLC after
Ryanair Holdings PLC said on Friday that it would sell its Aer
Lingus stake to the group.
"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 budget airline's Chief executive Michael O'Leary
said.
Ryanair, Europe's leading budget airline by passenger numbers,
acquired about 29.8% in Aer Lingus shares as part of its own
long-running but unsuccessful takeover attempts of the carrier. The
U.K. Competitions and Markets Authority, the country's antitrust
watchdog, had since told Ryanair to reduce its stake in Aer
Lingus.
Mr. O'Leary said Ryanair would make a small profit on its Aer
Lingus investment.
Analysts expect Ryanair to return the cash from the sale to
shareholders. Europe's largest discount airline didn't immediately
say what its plans are for the money generated from the sale.
British Airways-parent IAG had made a preliminary bid for Aer
Lingus at €2.55 ($2.89) a share in an all-cash deal comprising a
share offer and a cash dividend of five European cents a share. The
deal values Aer Lingus at €1.4 billion.
IAG had made the acquisition of Aer Lingus contingent on the
backing by Ryanair and the Irish government, which owns about 25%
of the national carrier's shares. The government in May gave its
backing to the takeover after winning concessions about traffic
guarantees from IAG.
The deal, if approved by antitrust authorities, would strengthen
IAG's hold on the lucrative trans-Atlantic market that is a major
driver of its profits. IAG also would acquire more takeoff and
landing slots at the busy London Heathrow airport, Europe's busiest
hub.
Write to Robert Wall at robert.wall@wsj.com
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