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IAG: Aer Lingus would join Oneworld and Atlantic pact

IAG would retain Aer Lingus’s brand and have the Irish airline enter the Oneworld alliance and its transatlantic joint venture if its latest takeover bid succeeds.

It disclosed further details of its intentions as Aer Lingus indicated that it was prepared to accept the financial terms of the bid.

The parent company of British Airways and Iberia says that it believes that its takeover proposal “would secure and strengthen Aer Lingus's brand and long term future within a successful and profitable European airline group, offering significant benefits to both Aer Lingus and its customers".

Should the offer succeed, Aer Lingus would continue to operate under its own brand and management, providing connectivity to Ireland while also leveraging synergies from IAG’s other businesses.

The Irish carrier would also join the immunised joint venture between American Airlines and British Airways that covers transatlantic routes. IAG says that this would allow it to leverage "natural traffic flows" between Ireland and the USA and the "advantageous geographical position of Dublin" for serving connecting flows.

IAG would seek to re-admit the Irish carrier into Oneworld. Aer Lingus had been a member up to April 2007, but left the alliance to pursue its own low-fare strategy, and form new partnerships with other carriers.

Aer Lingus would continue to focus on providing direct air links to Ireland, IAG emphasises.

“IAG recognises the importance of direct air services and air route connectivity for investment and tourism in Ireland and intends to engage with the Irish government in order to secure its support for the transaction,” it says.

The IAG bid, its third, comprises an all-cash offer of €2.50 ($2.81) per share and a cash dividend of €0.05 per share. It marks an increase on the €2.40 per share offer for the Irish carrier lodged at the end of December.

Aer Lingus’s board has indicated to IAG that it would be "willing to recommend" the acquisition, based on these financial terms, if it is satisfied with the way IAG proposes to address the "interests of relevant parties".

IAG’s bid is subject to a number of pre-conditions, including agreement by Ryanair and Ireland’s finance ministry to sell their respective 29.8% and 25.1% stakes.

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