EU clears Virgin’s Flybe takeover after buyer assuages monopoly concerns
The Virgin-led acquisition of Flybe received the green light from the European Commission today.
Read more: Connect Airways appoints new CEO ahead of EU approval
Antitrust officials gave the go-ahead despite raising competition concerns regarding certain routes becoming so-called quasi-monopolies.
Connect Airways – a consortium of Virgin Atlantic, Stobart Aviation and US private equity firm Cyrus Capital – have promised remedies that will see them release slots for the affected routes.
Five daily slots will be made available at Amsterdam Schiphol airport and three at Paris Charles de Gaulle airport to allow competition on the Birmingham-Amsterdam and Birmingham-Paris routes.
The EU had feared those routes could have fallen under a near monopoly overseen by Air France-KLM following its purchase of Virgin Atlantic, as well as Delta and Richard Branson’s Virgin group.
“The commitments fully address the competition concerns identified by the Commission regarding Connect Airways’ acquisition of Flybe,” the Commission said.
“The Commission therefore concluded that the proposed transaction, as modified by the final commitments, would no longer raise competition concerns. This decision is conditional upon full compliance with the commitments.”
Virgin’s pursuit of Flybe, along with Stobart and Cyrus, proved controversial in the months before the deal closed in February.
Flybe shareholders accused the board of underselling the company in a deal that saw their stakes valued at just 1p per share.
That triggered a huge 37 per cent revolt against the acquisition March, but the deal was passed with 63 per cent of votes.
Read more: Flybe shareholders approve Virgin takeover despite revolt
Flybe had urged investors to back the offer as the “only viable option”.
Other bids, such as a Mesa Air rescue offer backed by former Stobart boss Andrew Tinkler, were rejected.
Main image: Getty