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Lufthansa seek deadline extension on Austrian Airlines takeover deal deadline: Makes New Antitrust Offer

By Amarendra Bhushan for CEOWORLD Magazine Updated:July 28, 2009

The European Commission antitrust regulators has not yet approved anti-trust immunity for the planned merger of Lufthansa and Austrian Airlines.

Under the terms of Lufthansa´s public takeover offer, completion of the transaction is subject, inter alia, to the suspensive conditions precedent to anti-trust immunity and the approval by the EU commission of 500 million euros in restructuring aid. Currently the takeover offer foresees that these conditions have to be fulfilled by 31 July 2009.

The suspensive conditions may not be fulfilled by 31 July 2009

German airline Lufthansa was seeking to extend a July 31 deadline for its takeover of Austrian Airlines to give itself more time to secure approval from Brussels, Austrian newspapers reported Monday.

Lufthansa applied to the Austrian takeover commission Monday to extend its deadline, the dailies Die Presse and Standard wrote in their online editions.

They did not say when the new deadline could be.

The German carrier had said until now that its takeover offer, which must still be approved by the European Commission, would only stand until July 31, prompting fears the deal might fall apart at the last minute.

The European Commission launched an inquiry at the start of the month into the proposed link-up and gave itself until November 6 to make a decision.

It fears the takeover could lead to higher prices for passengers or fewer flights on some routes and has demanded Lufthansa make concessions to protect European air travellers.

Concessions so far have been deemed insufficient by the commission.

Monday evening, the daily Kurier reported on its online edition that Lufthansa was prepared to give up key slots required by the Commission to greenlight the takeover of Austrian Airlines (AUA).

The German carrier was prepared to hand six of its 10 take-off and landing slots between Vienna and Frankfurt to its competitors, including Austrian low-cost airline Niki and Slovenia’s Adria Airways, Kurier wrote.

The surrender of key slots between European hubs was one of the demands of the commission, which has asked for reassurances that Lufthansa’s deal with AUA would not distort competition.

“There is a constant to- and fro-ing but things are looking good at the moment,” Kurier quoted a source close to the case as saying, adding that the deal depended now “only really on peanuts.”

“In principle, everything is still possible,” the daily also quoted Maria Javorova, spokeswoman for EU Competition Commissioner Neelie Kroes, adding that the Commission was close to making a decision.

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