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EEC Commission To Probe Takeover of British Caledonian

December 23, 1987

BRUSSELS, Belgium (AP) _ The European Economic Community said Wednesday it will investigate British Airways PLC’s takeover of British Caledonian Group PLC for compliance with EEC competition rules.

A spokesman for the EEC’s executive Commission said the investigation follows a complaint by the Airlines of Britain Group which owns British Midland Airways and other air carriers.

The airlines alleged the takeover could lead to the distortion of competition among European air carriers in violation of articles 85 and 86 of the Community’s founding Treaty of Rome.

British Airways said Monday it had obtained 51 percent of British Caledonian through a $457 million bid.

The deal represents a defeat for a rival suitor, Scandinavian Airlines System, which fought hard for control of the ailing Caledonian.

It was expected EEC and British Airways will meet early next year to discuss the takeover. EEC Competition Commissioner Peter Sutherland has already expressed concern about various aspects of the takeover in a recent letter to British Airways.

EEC officials said, however, the letter was part of an ″informal process″ and gave no details about the likely time frame of a formal investigation.

″We just wanted to let the airlines know that there are aspects of the takeover which worry us,″ said one senior Commission official who asked to remain anonymous.

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