Response to UK Competition Commission findings on Ryanair and Aer Lingus

BRUSSELS, Aug. 28, 2013 /PRNewswire/ -- Cadwalader, Wickersham & Taft LLP (Cadwalader), a leading counsellor to global financial institutions and corporations, welcomes today's decision from the UK Competition Commission. The UK's second-instance antitrust watchdog has concluded that Ryanair's minority stake in Aer Lingus allows it to materially influence Aer Lingus' commercial policy and strategy in a way that has been or may be anticompetitive.

This finding from the UK Competition Commission is a very significant milestone in a protracted legal battle which has repeatedly stretched the boundaries of both EU and UK merger control and thrown up untested issues as to the interplay between EU-level and national competition regimes.

UK law allows merger control scrutiny of minority shareholdings which do not count as mergers under EU rules.

Alec Burnside, Managing Partner of Cadwalader's Brussels office, and counsel to Aer Lingus, said: "Ryanair's 29.82% shareholding has been used as a Trojan horse against Aer Lingus for the last seven years since the original 2006 bid. It has been the platform for Ryanair's failed rebids for Aer Lingus in 2008 and 2012. The CC has now found that those rebids have harmed competition between the two rivals. The European Commission needs jurisdiction to scrutinise and protect businesses from anti-competitive minority shareholder situations like this one."

In part as a result of the unique issues presented by this case, the European Commission is currently consulting on whether to change its legislation.

Burnside added: "Cadwalader has been privileged to assist Aer Lingus in this extraordinary odyssey. The case has tested the limits of EU and UK merger review. We are delighted to have been able to find a solution for Aer Lingus through the UK CC when the European Commission was unable to act."

The final report issued by the UK Competition Commission can be found at http://www.competition-commission.org.uk/assets/competitioncommission/docs/2012/ryanair-aer-lingus/130828_ryanair_final_report.pdf

Notes to Editors

• A landmark finding by the UK Competition Commission (CC) has been published today concluding that Ryanair's 29.82% stake in Aer Lingus enables it to materially influence the commercial policy and strategy of its competitor. The UK Competition Commission is now requiring Ryanair to sell down most of its stake to 5% to remedy this anticompetitive situation.
• Ryanair's presence on the Aer Lingus share register for the last seven years has been contrary to the interests of the 14 million passengers who fly on routes between the island of Ireland and Great Britain. In addition, it has been an impediment to Aer Lingus' ability to engage in M&A activity.
• Alec Burnside is a leading EU merger control specialist with three decades of experience in advising on major multinational transactions and other antitrust issues. Since its opening in May 2011, the competition team in Cadwalader's Brussels office has been involved in the highest profile complex merger reviews carried out by the European Commission, including most recently the prohibition of the UPS/TNT Express transaction and Ryanair's third bid for Aer Lingus.

About Cadwalader, Wickersham & Taft LLP
Cadwalader, Wickersham & Taft LLP, established in 1792, is one of the world's leading international law firms, with offices in New York, Washington, Charlotte, Houston, London, Hong Kong, Beijing and Brussels. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in insurance and reinsurance, financial markets, longevity risk, pension fund deficits, antitrust, banking, business fraud, corporate finance, corporate governance, environmental, financial restructuring and reorganizations, healthcare, intellectual property, litigation, mergers and acquisitions, securitization, structured finance, and tax. More information about Cadwalader can be found at www.cadwalader.com.

About UK Competition Commission
The Competition Commission (CC) is an independent public body which helps to ensure healthy competition between companies in the UK for the ultimate benefit of consumers and the economy. It conducts in-depth investigations into mergers and markets and also has certain functions with regard to the major regulated industries.

• The press release issued by the Commission can be found at http://www.competition-commission.org.uk/media-centre/latest-news/2013/Aug/cc-requires-ryanair-to-sell-shareholding.
• The complete case file is located on the UK Competition Commission's website at http://www.competition-commission.org.uk/our-work/directory-of-all-inquiries/ryanair-aer-lingus.

Contacts:
Adam Segall +1 212 504 6492
[email protected]
Kara Condon +32 (474) 991 060
[email protected]

SOURCE Cadwalader, Wickersham & Taft LLP

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