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John Menzies’ takeover of Airline Services ready for takeoff after CMA gives green light

Aviation services firm John Menzies’ shares nudged up in early trading as the group announced it had been given the green light on its takeover of London-based company Airline Services.

The Competition and Markets Authority (CMA) approved the buyout this morning, meaning Menzies can go ahead taking control of the firm in a deal originally struck in April last year.

Read more: Menzies profits hit by airport contract losses

Airline Services, with an annual turnover of £34.9m, provides de-icing and aircraft presentation services to 60 airlines at 12 UK airports, together with ground handling operations at London Gatwick.

“We now look forward to taking control of the business, driving the identified synergies and boosting our footprint and product offering across our UK business,” the Menzies said in a update.

The CMA issued a statement this morning, saying its in-depth investigation had “allayed competition concerns”.

Concerns centred around the merger providing “less choice and higher prices or a reduction in quality” for the companies’ services for airlines in England and Scotland.

But the watchdog gave the merger the all-clear after finding the market for ground handling services at airports had “a strong recent history of companies entering and competing for contracts”.

It added: “Menzies and Airline Services are not close competitors in the market for de-icing services, meaning the takeover would not lead to a substantial lessening of competition.”

In the trading update, Menzies also announced it had “significantly reduced” its pension deficit since the last valuation process.

After selling off its print media distribution arm for £74.5m in July, the deficit has reduced from a reported £116m in March 2015 to a year-end figure of between £60m and £65m, it said.

Read more: John Menzies shake-up urged by German investor

It added trading performance elsewhere for the year ending 31 December has been “in line with market expectations”.

Shares were up 1.14 per cent in early trading.