Jurisdictional turbulence ahead: Ryanair/Aer Lingus
In 2007, the European Commission prohibited Ryanair’s attempted hostile bid to acquire rival Irish airline, Aer Lingus. It also refused to order Ryanair to divest its 29.8% stake in Aer Lingus, which it had built up during its aborted public bid. The General Court later upheld both the prohibition of the merger and the refusal to require divestment of the minority shareholding. Subsequently, the UK Office of Fair Trading investigated Ryanair’s minority shareholding in Aer Lingus; Ryanair’s challenges to the OFT’s jurisdiction were rejected by both the Competition Appeal Tribunal and the Court of Appeal. On 1 June the Supreme Court refused Ryanair leave to appeal, thus confirming the OFT’s ability to investigate the transaction, which it referred to the Competition Commission on 15 June. However, immediately thereafter, Ryanair launched a third hostile bid to acquire Aer Lingus, leading to further litigation before the CAT to challenge the Competition Commission’s jurisdiction.
This blog post examines the complex interaction of European Commission and national authority jurisdiction to examine different transactions involving the same parties, as well as the OFT’s reasons for referring Ryanair’s minority shareholding to the Competition Commission.