Martin Cullen (Waterford, Fianna Fail)

When the Ryanair offer is formally made, it will be a matter for the board of directors of Aer Lingus to evaluate the offer and to express an opinion to shareholders. Aer Lingus has already said that the approach is wholly opportunistic and has advised shareholders to take no action on the offer.

Takeovers of listed companies are subject to regulatory controls, both under takeover rules and competition rules. The takeover code prescribes the timetable and procedures under which bids are conducted. There is a question as to whether jurisdiction for the purposes of merger clearance rests with the European Commission or member states. European jurisdiction applies where certain thresholds relating to the turnover of the entities concerned are exceeded both in aggregate terms and in at least three member states. While it is expected that jurisdiction will lie with the European Commission, the question of jurisdiction can only be resolved when a formal notification has been made and the Commission can access the necessary turnover information.

Under the applicable EU law, where it is established that a proposed merger falls within the jurisdiction of the European Commission, a member state may nevertheless request that the case be referred back to it for the application of its own national merger laws in certain limited circumstances. It is a matter for the Irish Competition Authority, which is independent in the exercise of its functions, to form a view as to whether such a request is appropriate. The decision on whether to grant such national jurisdiction lies with the European Commission.

My Department and the Department of Finance are working closely with advisers to prepare a case for submission to the European Commission. The Departments are also consulting with the Office of the Attorney General. Officials of my Department will meet the Competition Directorate of the European Commission later this week to make an initial presentation on the proposed take-over bid.

The Government is firmly of the view that Ireland's economic interests are best served by having as many airlines as possible competing vigorously and seeking to exploit all possible opportunities for new services. It wants to see a strong Aer Lingus and a strong Ryanair competing with each other.

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