EU Clears Lufthansa To Buy Brussels Airlines

Lufthansa won permission from EU antitrust authorities on Monday to buy Brussels Airlines in a deal worth up to EUR250 million euros (USD$347 million) after it agreed to let rivals fly on some of its routes.

"The comprehensive remedies package offered by Lufthansa will facilitate market entry on the affected routes and thereby create alternative choices for passengers," EU Competition Commissioner Neelie Kroes said in a statement.

To address the European Commission's competition concerns, Lufthansa will allow new entrants to operate flights from Brussels to Frankfurt, Munich, Hamburg and Zurich. The remedies also include code-share agreements and participation in frequent-flyer programs.

The acquisition will boost Lufthansa's network and give it more premium travelers.

As part of the deal, Lufthansa will buy a 45 percent stake in Brussels Airlines for EUR65 million, with an option to take the rest from 2011. The total price would depend on performance-related factors and, initially, on 2010 results.

Airlines around the world are looking to merge with or acquire rivals to boost scale and tap into growth regions following falling demand due to the global economic crisis.

The Commission, which had cleared Lufthansa's takeover of low-cost British carrier bmi last month, is now looking into its proposed buy of loss-making Austrian Airlines, with the deadline for that review set for July 1.