Greece’s Aegean Airlines has won European Union approval to buy loss-making rival Olympic Air at the second attempt, after a new antitrust investigation found Olympic would close down if the deal was blocked. Aegean has said the proposed 72 million-euro ($96.4 million) deal is crucial for both airlines amid a decline in domestic demand in recession-hit Greece. “It is clear that, due to the on-going Greek crisis and given Olympic’s own very difficult financial situation, Olympic would be forced to leave the market soon in any event,” EU Competition Commissioner Joaquin Almunia said on Wednesday.
“Therefore we approved the merger because it has no additional negative effect on competition,” he added.
Reuters had reported on October 2 that the European Commission would clear the deal.
The EU competition authority, which vetoed Aegean’s first attempt to buy Olympic in 2011 from investment group Marfin (MRFr.AT), said the number of overlapping serviced by both carriers had been reduced since its decision almost three years ago.
It also said other airlines would be unlikely to enter the Greek market and compete with Aegean and Olympic, and that there was no other buyer for Olympic.
The regulator’s approval marks the first time it has cleared a deal it previously rejected. Ryanair made history when the Commission blocked its third acquisition bid for Aer Lingus in February.
Olympic, founded in 1957 by the late shipping magnate Aristotle Onassis, fell into a steady decline after being operated for decades by the Greek government, saddling the state budget with losses.