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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."