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EU will open in-depth probe of Lufthansa's Austrian Airlines takeover

Jul 01, 2009

FRANKFURT - Deutsche Lufthansa AG said Wednesday the European Commission will start an in-depth anti-trust probe into Lufthansa's planned takeover of Austrian flag carrier Austrian Airlines AG.

The Commission decided on an in-depth probe, or Phase II, after completing Phase I of the antitrust investigation, Lufthansa said.

The airline said the Commission's launch of an in-depth probe comes as a surprise, against the background of both airlines' long-term joint venture.

"Nevertheless Lufthansa remains confident to receive the necessary approvals with justifiable remedies," Lufthansa said.

It also said that anti-trust approval of the planned merger has already been granted by the respective competition authorities in the U.S., Canada, Turkey, Israel, Albania, Bosnia and Ukraine. Regulatory clearance for Serbia is expected to be granted shortly.

Austrian Airlines, which is currently controlled by the Austrian state's holding company OeIAG, is being sold after it flew in huge losses and a future stand-alone solution for the airline was deemed unviable.

Lufthansa already signed the acquisition deal, but under the condition that the merger passes an antitrust probe by the European Commission and also that the commission approves a EUR500 million state-aid injection into the airline.

Lufthansa pointed out several times that its acquisition offer is valid until July 31.

Lufthansa is proposing to pay EUR4.49 a share for Austrian Airlines' outstanding share. The takeover will also receive help from the Austrian government in the form of EUR500 million in restructuring aid.

EU will open in-depth probe of Lufthansa's Austrian Airlines takeover
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