EU delays ruling on Lufthansa-AUA deal: report
(VIENNA) - The EU Commission is split over Lufthansa's takeover of Austrian Airlines and the long-expected ruling on the deal has been delayed by another two weeks, the daily Der Standard reported on Monday.
Originally, Brussels had been scheduled to decide on the takeover of the ailing Austrian carrier by the German rival on July 1.
But Transport Commissioner Antonio Tajani and Competition Commissioner Neelie Kroes cannot agree on a 500-million-euro (701-million-dollar) subsidy from the Austrian state at the centre of the deal, the newspaper reported, quoting sources in Brussels.
The final decision has now been set back by two weeks and may even see the deal unravel completely, it said.
Der Standard said that Tajani had more or less rubber-stamped the takeover of loss-making AUA by its much-bigger German rival, arguing that it would less expensive than restructuring the Austrian carrier so it that it could survive on its own, placing it in insolvency, or liquidating it completely.
But Kroes had vetoed approval, insisting that the Austrian state subsidy can only be allowed if there is a much deeper restructuring, including a massive reduction of routes, Der Standard reported.
Lufthansa has warned that it might not go ahead with the deal if the conditions that Brussels are too restrictive.
Last month, the German flag carrier said that more than 85 percent of AUA's shareholders had accepted its takeover offer.
Lufthansa wants to acquire AUA fully and signed a deal at the end of 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 with Lufthansa was an agreement that the Austrian state absorb 500 million euros -- or just over a third -- of AUA's debts.
But that has enraged rival airlines, such as Franco-Dutch carrier Air France-KLM, which had sought to buy AUA, as well as other airlines such as British Airways and low-cost carrier Ryanair.
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