John Menzies PLC’s (LON:MNZS) purchase of Airline Services Limited has been provisionally cleared for take-off after a Competition Markets Authority (CMA) investigation allayed competition concerns.
The CMA initially raised concerns that the merger could restrict choice for airlines at a number of key airports in England and Scotland for both de-icing and ground handling, potentially leading to higher prices or a worse service. This led to another phase of the investigation.
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“Based on a thorough evaluation of the wider evidence base in the phase 2 inquiry, it has found that the market for ground handling services is particularly dynamic, with a strong recent history of companies entering the market to compete for contracts,” the CMA said in a statement on Friday.
“With regard to de-icing services, the CMA has found that competition between Menzies and Airline Services is very limited such that the merger would not lead to a substantial lessening of competition,” it added.
The logistics firm bought the trade and assets of Airline Services, a UK-based aircraft de-icing specialist, to boost its UK presence. Both companies supply UK airlines and airports with support services, including de-icing, ground handling and maintenance of aircraft interiors.
The CMA said it was currently inviting comments on its findings until 9 January 2019. It will then consider any submissions it receives before reaching a final decision, the deadline for which is 28 January 2019.
John Menzies shares were 0.6% down at 502.0p in mid-morning trade.
- updates with share price -