Concerns over price of carrier
The European Commission is to investigate the planned takeover of Austrian Airlines by Lufthansa.
The EC said it had "doubts" about the deal on three fronts.
The first was whether the price reflected Austrian's value "for what is being sold."
The other two were over whether the Austrian government had acted as a "private investor" and whether the re-structuring planned proposed by Lufthansa fitted the EC's framework for rescuing companies in trouble.
This is the second investigation into Lufthansa's expansion plans announced by the EC this year.
It is already carrying put an in depth probe in its plans to buy 45% of Brussels Airlines.
Lufthansa, under the deal for the then largely state-owned carrier, agreed to pay the Austrian government €366,268 for its 41.6% stake.
The second part of the agreement was that the Austrian state received a "debtor warrant" from Lufthansa which might lead to additional payments.
The last element was that the Austrian government paid Lufthansa €500m for a "capital increase" in Austrian Airlines.
Besides the concerns over the price, the EC said it also doubted "whether the sale was truly open, transparent and unconditional and whether the State really acted as a market economy investor."
The EC added that it also doubted whether the the amount of aid to the aid had been "kept to a minimum" and whether the re-structuring plan would restore Austrian to long term viability as quickly as possible.
The Commission said it also doubted "certain elements" of this plan as to whether they met the EC criteria for authorisation of restructuring aid.
www.aua.com www.lufthansa.com http://ec.europa.eu/index_en.htm