IAG makes third offer to take over Aer Lingus

IAG has made its third offer to buy Aer Lingus, the national airline of Ireland. At €2.55 (US$2.85) per share, this is the most generous offer yet, besting its last offer of €2.50 per share. Aer Lingus is valued at more than €1.3 billion. It is the leading air carrier of air cargo to and from Ireland in key European and U.S. markets, using a 50-aircraft, all-Airbus fleet.

IAG, formed by a merger of British Airways and the Spanish carrier, Iberia, has had its eye on Aer Lingus after three failed hostile takeover bids by Dublin competitor, Ryanair. Aer Lingus has 24 landing slots at Heathrow Airport, British Airways’ primary hub. They are valued at €400 million, or US$450 million.

Through a unique “pre-clearance” arrangement with U.S. Customs and Immigration, Enforcement, Aer Lingus is also able to clear U.S.-bound passengers at its Dublin hub, freeing returning American citizens from added customs hassles at their U.S. destinations. It’s possible that, should the merger occur, IAG could relieve pressure on Heathrow by moving U.S. tourists through pre-cleared Irish airports.

IMPACT, the main union representing cabin crew, pilots and some ground staff at Aer Lingus, said a takeover could lead to the loss of up to 1,200 jobs, which is a quarter of the workforce. The union’s secretary, Matt Staunton, said the proposed takeover represents significant risks to Irish interests, in terms of accessibility to Ireland for business and tourism.  He said it also is a risk to employment security for Irish workers employed directly or indirectly by Aer Lingus.

Following the British Airways-Iberia merger that created IAG, there were 4,500 job losses.