Ireland agrees to sells it Aer Lingus stake to IAG for €1.36bn
After much anticipation the Irish government has finally agreed to sell its 25 per cent in Aer Lingus to British Airways owner International Consolidated Airlines (IAG).
The Irish airliner's board recommended IAG's proposed €1.36bn (£961bn) offer in February but it still needs support from the other main shareholder, Ryanair.
Market sources previously speculated that a deal between the two would be welcomed by rival airline Ryanair, which has a 29 per cent stake in Aer Lingus.
And if a deal does go through it will bring Aer Lingus back under the leadership of Willie Walsh, IAG’s chief executive. Walsh was chief executive at Aer Lingus from 2001 until 2005.
Aer Lingus previously rejected two of IAG's offers saying that it had “fundamentally undervalued” the business in making its initial offer.
The deal had also suffered from political obstacles such as Irish politicians' worries over job losses as well as a loss of connections between Irish airports and Heathrow.
"IAG has provided additional information and certain commitments in relation to its proposal," Paschal Donohue, Ireland’s transport minister, said today.
"Following detailed consideration of this and all of the issues surrounding a potential disposal of the state’s shareholding in Aer Lingus, the government has decided that it will support IAG’s proposal."
Today's deal has seen IAG extend guarantees over routes to Ireland from Heathrow from five to seven years, nevertheless it's still less than the 10 years the Irish government has been hoping for.