Following a number of attempts, after exploring a variety of ways and concurring on a favorable price for the buyers, Aegean Airlines and Marfin Investment Group (MIG) agreed on Monday on the sale of 100 percent of Olympic Air to the former, the two companies announced. The price of the buyout, which is pending watchdog clearance, was set at 72 million euros.
If the deal is approved by domestic and European regulators, which had proved to be a stumbling block during a previous attempt in January 2011, Olympic will now conduct its flying activities as an Aegean subsidiary rather than a MIG subsidiary. Olympic?s other two arms ? its technical base and ground handling services ? will still be MIG subsidiaries. MIG had acquired all three from the state for 177.2 million euros in 2009.
Aegean and MIG announced that Olympic and Aegean will retain their brand names and their separate flying activities, uniforms and staff. The unification will at first be only on an administrative, technical and commercial level. Sources say that Aegean recently went ahead with a significant number of layoffs in anticipation of yesterday?s deal.
The timetable for the implementation of the agreement will be determined by the competent competition authorities. Sources suggest it is not yet clear whether the buyout deal will eventually concern the European competition authorities, besides the Greek ones, given that the market share of Aegean and Olympic is considerably reduced compared to what it was in 2010 and 2011. If it is deemed that the main activities of the two airlines are in domestic services, then they would not have to refer to the European authorities at all. Sources from the Greek competition authorities said they expect to be notified whether they will have to examine the agreement or whether it will be forwarded directly to the European ones.
At the same time, the presence of Cyprus Airways in the Greek market has grown since it ended its code-sharing agreement with Olympic. It is this very presence in Greece that could be the main argument to persuade the competition authorities that no monopoly is being created by the Aegean-Olympic deal.
Development Ministry sources commented that the deal is the result of the crisis, and will be judged by the competent authorities.