JOHN Menzies has been given the all-clear to complete its acquisition of Manchester-based Airline Services, an aircraft de-icing and ground handling specialist.
The deal, first announced in April, had been subject to an in-depth Phase 2 investigation by the Competition and Markets Authority (CMA), amid concern it could lead to less choice, higher prices and a reduction in the quality of services for airlines at key airports in Scotland and England.
However, announcing its final decision, the CMA cleared the merger. In a statement to the stock market, the watchdog said that it found the market for ground handling services has a strong recent history of companies entering and competing for contracts.
The watchdog also ruled that Menzies and Airline Services are not close competitors in the aircraft de-icing market, meaning the takeover would not lead to a substantial lessening of competition.
READ MORE: Menzies makes progress in aviation market
John Geddes, executive director of Menzies, told The Herald that the Edinburgh-headquartered firm was now looking forward to beginning the process of integrating Airline Services.
He noted that the addition will expand its UK business and take it into airports it is not currently present in, including Liverpool, Newcastle and Birmingham.
Mr Geddes said: “It adds product and breadth to our UK business. I think ASL are in 20 airports, primarily in de-icing. They do a bit of ground handling in Manchester and Gatwick. But what this will do is add another string to our bow at a number of airports.
“It gives us a de-icing operation which might add on to our existing ground handling operations; it also takes us into a number of airports in the UK we are not currently at. We will de-ice there, but if it is the right thing to do to expand into these airports, we will appraise the opportunity and hopefully expand our business.”
Mr Geddes said that, with Menzies having acquired the trade and assets of Airline Services, his company will “welcome all ASL employees into the Menzies family”. Around 900 staff are expected to transfer to Menzies.
Mr Geddes added that Menzies would continue to look at further acquisition opportunities, noting that it is particularly interested in “bolt-on” deals for firms which are “highly synergistic”. But he said the firm would look to grow organically “first and foremost”, declaring that there is a “huge opportunity to do that”.
He added: “It will be a mix of both, but slanted towards organic growth.”
Shares in Menzies closed up 13p at 540p.
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