EU probes Lufthansa takeover of Austrian Airlines | india | Hindustan Times
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EU probes Lufthansa takeover of Austrian Airlines

The European Commission on Wednesday put off a ruling on Lufthansa's takeover of Austrian Airlines and opened an in-depth probe that could jeopardise the deal, which was opposed by rival airlines.

india Updated: Jul 02, 2009 15:44 IST

The European Commission on Wednesday put off a ruling on Lufthansa's takeover of Austrian Airlines and opened an in-depth probe that could jeopardise the deal, which was opposed by rival airlines.

Competition Commissioner Neelie Kroes announced the decision in a statement, saying there were fears that the takeover deal would lead to an increase in prices for passengers and possible reduced operations on some routes.

A source close to the matter, speaking on condition of anonymity, told AFP earlier: "Lufthansa's offer for Austrian Airlines expires July 31 and if the conditions are not met then they will drop the offer."

Lufthansa wants to acquire AUA fully and signed a deal last year to acquire a 41.6-percent stake in AUA from the Austrian state holding company OeIAG for the symbolic sum of one-euro cent per share or just over 366,000 euros in all.

One of the conditions for the deal was an agreement that the Austrian state would absorb 500 million euros -- or just over a third -- of AUA's debts.

But those terms have enraged rival airlines, such as Franco-Dutch carrier Air France-KLM, which had also sought to buy AUA, as well as other airlines such as British Airways and low-cost carrier Ryanair.