EU Deepens Antitrust Probe Into Lufthansa/Austrian Deal
July 01 2009 - 2:56PM
Dow Jones News
The European Commission Wednesday launched an in-depth
investigation into Lufthansa AG's (LHA.XE) plan to buy Austrian
Airlines AG (AUA.VI).
The commission deepened the probe amid worries that, unchecked,
the merger could lead to higher fares and reduced choice to
consumers on certain routes. The commission said that in the
"absence of appropriate remedies," it had "serious doubts" whether
the deal could be allowed.
The commission now has up to 90 days to decide whether to allow
or block the deal.
The deal with Lufthansa is seen as key to maintaining the
solvency of Austrian Airlines, which has been hit hard over the
last year, first by soaring oil prices and then the global economic
crisis.
Lufthansa is proposing to pay EUR4.49 a share for Austrian
Airlines' outstanding shares. The takeover will also receive help
from the Austrian government in the form of EUR500 million in
restructuring aid, which is being scrutinized by the commission
separately.
-By Peppi Kiviniemi, Dow Jones Newswires; +32 (0)2 741 1 483;
peppi.kiviniemi@dowjones.com