The European Union has expressed concerns over the potential anti-competitive effects of the International Consolidated Airlines Group’s (OTC:ICAGY) planned acquisition of Air Europa, valued at approximately $427.7 million. 

The acquisition aims to enhance IAG’s presence in the Spanish and Latin American markets.

Late on Friday, the European Commission expressed concerns that the merger between International Consolidated Airlines Group and Air Europa might result in increased prices and reduced service quality for air travelers, particularly on routes within and to and from Spain.

The preliminary findings of the Commission’s investigation indicate that the consolidation could substantially restrict competition in the passenger air transport market, potentially leading to higher costs and diminished service quality for consumers following the transaction.

In response to these concerns, the European Commission has issued a formal statement of objections. 

IAG can propose measures to resolve the initial competition concerns noted by the Commission and may submit these solutions at any point during the proceedings up until the deadline on June 10, 2024.

“Compared with the remedy package we submitted in our previous attempt to acquire Air Europa, we are doubling our offer in terms of divested capacity,” a WSJ report cited IAG.

Price Action: ICAGY shares traded lower by 0.80% at $4.33 at last check Monday.

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