EU doubts over take over
Lufthansa has filed its formal request for EC approval for its bid to take over Austrian Airlines.
The EC is already reviewing the bid over its concerns about the price and the restructuring plan.
The first phase of its review is expected to be completed by June 17.
Wolfgang Mayrhuber, Lufthansa's chairman and ceo, has said that his airline will not proceed if the EC rules against it.
The EC launched its investigation into the take over in February citing three elements of the deal with which it was unhappy.
In the first part of the deal, Lufthansa 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.
As well as 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 amount of aid had been "kept to a minimum" and whether the re-structuring plan would restore Austrian to long term viability as quickly as possible.
Lufthansa's bid is conditional on it buying at least a 75% percent stake following.
It offered €4.49 per share to shareholders of Austrian in February.
The offer expires today (May 11).
Lufthansa also expected to hear on Thursday (May 14) whether it will be allowed by the EC to take a controlling interest in the UK carrier bmi.
The airline has a 30% stake in the carrier and an option to buy the 50% plus one share holding of bmi chairman Sir Michael Bishop.
Sir Michael, 66, indicated last October that he wished to sell.
The remaining 20% of bmi is owned by SAS which has said it also wishes to sell.
The EC is also holding an "in-depth" probe into Lufthansa's bid for Brussels Airlines, a decision on which is expected on June 10.
www.aua.com www.lufthansa.com http://ec.europa.eu/index_en.htm