The Israeli Antitrust Authority (IAA) has announced that El Al Israel Airlines (LY, Tel Aviv Ben Gurion) has abandoned plans to acquire Israir (6H, Tel Aviv Ben Gurion) from Israeli conglomerate, IDB Development.
In July last year, Israir's parent firm IDB said it would sell all of its shares in the airline to El Al's Sun d'Or International Airlines unit for USD24 million in cash and a 25% stake in the merged Sun d'Or entity. In turn, Israir would assume Sun d'Or's operations while allocating 75% of its shares to El Al. After the merger, Israir would then focus on low-cost, domestic flights and El Al vacation packages.
The tie-up was subsequently blocked by the IAA in January over concerns it would lead to a lack of competition in the key Tel Aviv-Eilat market and would also further concentrate on-board security services in the hands of El Al. The two parties signalled their intention to appeal the ruling which was to have been held on Wednesday, June 20.
However, in a statement issued June 20, the regulator said the two carriers had informed the IAA of their decision not to appeal the ruling in light of their decision not to proceed with the merger. The move now leaves Israir open to pursue other prospective suitors.
