Lufthansa Given the Go Ahead for Austrian Airlines Takeover

The well known German carrier Lufthansa has now been given the go ahead for a takeover of Austrian Airlines. However, this green light has to be met with a series of conditions.

The European Commission antitrust chief, Neelie Kroes, made this announcement just after a series of talks were concluded with the chief executive of Lufthansa, Wolfgang Mayrhuber. Kroes, had already instructed to draft a conditional clearance decision. This draft will then be considered by the European Union member countries, and a final proposal will be presented for adoption by the commission. This will all happen as soon as possible.

The takeover will also be given a restructuring bailout from the Austrian government of almost €500 million, and Lufthansa will be offering €4.49 a share for Austrian Airlines’ outstanding shares. The new proposal was accepted just after the Austrian Airlines takeover committee granted Lufthansa extended time to back out of the deal. The original date for the last day that Lufthansa could back out of the deal was set for July 31, but the extended time gave Lufthansa until August 31.

Before the deal was accepted, the European Commission had rejected several proposals over fears that Lufthansa would gain a monopoly on routes between Vienna and other European cities. They also had fears that Lufthansa would gain a monopoly in Switzerland as it already owns Swiss International Air Lines as well.

The newest offer was accepted after Lufthansa said that it would relinquish slots on five city routes flying out of Vienna. During this time the European Commission also sent out questionnaires to Lufthansa’s competitors, as well as interested parties, to find out whether they agreed that what Lufthansa was offering was enough.