EU to investigate KLM bid for Martinair

9th September 2008, Comments 0 comments

EU regulators opened an investigation Monday into KLM's bid for smaller Dutch airline rival Martinair.

9 September 2008

BRUSSELS -- EU regulators opened an investigation Monday into KLM's bid for smaller Dutch airline rival Martinair, nearly a decade after EU antitrust worries forced KLM to pull back from an earlier takeover attempt.

The European Commission said it believed the deal might substantially reduce competition on passenger flights between Amsterdam and the Caribbean, particularly the vacation destinations of Curacao and Aruba.

KLM had offered to make changes to soothe these concerns, but regulators said these "were not sufficiently clear-cut to remove the Commission's serious doubts".

KLM, the Dutch branch of carrier Air France-KLM, currently owns 50 percent of the loss-making Martinair and plans to buy out Danish shipping company AP Moller-Maersk A/S. It is the second time it has tried to take control of Martinair. EU concerns forced it to drop a 1999 bid.

The EU will take until 21 January to examine the deal. It rarely blocks takeovers but it can call on companies to eliminate antitrust problems by selling off units or making major changes to the way they do business.

EU competition commissioner Neelie Kroes said regulators had to take care to keep customer choice open as airlines consolidate.

In 2007, Kroes prevented Irish airline Ryanair Holdings PLC from buying rival Aer Lingus PLC, a hostile bid that EU officials said would create a monopoly on several flights out of Ireland. That airline merger was one of only two deals she has blocked since 2004.

[AP / Expatica]

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