January 26, 2011 / 11:50 AM / 8 years ago

EU blocks Olympic/Aegean merger, says anti-competitive

BRUSSELS, Jan 26 (Reuters) - EU competition regulators blocked on Wednesday the proposed merger of Aegean Airlines (AGNr.AT) and Olympic [OLY.UL] because the combined Greek carriers would have a quasi-monopoly in the domestic market.

It was the first merger prohibition by the European Commission since June 2007, when it blocked the attempt by Irish low-cost carrier Ryanair (RYA.I) to acquire Aer Lingus AERL.I.

Aegean and Olympic had not offered sufficient remedies to ease competition concerns, the EU watchdog said in a statement, confirming a Reuters report on Jan. 20. [ID:nLDE6730ZC]

“The merger between Aegean and Olympic would have led to a quasi-monopoly in Greece and thus to higher prices and lower quality of service for Greeks and tourists travelling between Athens and the islands,” EU Competition Commissioner Joaquin Almunia said.

He said the remedies offered by the carriers would not have protected travellers adequately.

Aegean tried to buy Olympic in March 2009 but the Greek government picked buyout firm Marfin Investment Group (MRFr.AT) despite its lower bid, because of fears an Aegean bid would face competition issues.

An Olympic/Aegean merger would create a dominant carrier in Greece’s domestic market, with a fleet of 64 aircraft and a workforce of 5,850 employees.

Reporting by Foo Yun Chee

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