OFT to decide on BA BMI takeover today

The UK Office of Fair Trading must notify the European Commission today if it wants the International Airlines Group (IAG) takeover of BMI referred to it.

British Airways’ parent IAG agreed a £172 million deal for BMI with current owner Lufthansa just before Christmas and the takeover was referred to the European Commission last month.

An OFT spokesman confirmed: “We have to the end of Monday to request the deal is looked at by us.”

IAG and Lufthansa hope the EC will decide by the end of this month to give the deal the go ahead, but it could choose to undertake a more thorough review of the impact of the takeover. Either a second-phase investigation or a referral to the OFT would delay a decision and could put the deal in jeopardy.

Lufthansa is understood to want the deal completed by the end of March. The terms of the takeover allow for a break in the agreement.

Virgin Atlantic has led demands for the EC to block the deal and has presented its own bid for BMI to Lufthansa. Scottish politicians of all four major parties have expressed concerns about BMI being swallowed by BA.

In a submission to the Commission, Virgin Atlantic insisted: “There are no appropriate remedies to negate the anti-competitive harm arising from the proposed transaction.”

Virgin president Sir Richard Branson called last month for a block on the bid and said his carrier “can replace BMI’s challenge to BA by adding regional UK flying”.

IAG has said: “BMI is a massively loss-making airline. Selling it to IAG offers the best solution for British consumers and UK plc. This deal is the only option for safeguarding services to the UK regions.”

The OFT did seek a referral of the last major UK travel industry merger, the retail deal between Thomas Cook, The Co-operative Travel and Midlands Co-operative. That merger went ahead without remedies, but did so 10 months after it was announced.

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