John Menzies receives conditional approval for ASIG merger

John Menzies, Scottish distribution and aviation company, has received approval from the Competition and Markets Authority (CMA) for its acquisition of ASIG from BBA Aviation on the condition that it can address its concerns with the lack of competition at the Aberdeen airport.

“Menzies and ASIG are close competitors at Aberdeen airport and, following the merger only Swissport, will remain as a credible bidder for airlines located there,” said the CMA in a statement.

Other airports where both airlines operate in, like Manchester and London Heathrow, would in contrast have a number of credible competitors to bid for future contracts.

In order to avoid an in depth investigation, the airline must offer a remedy to address the watchdog’s concerns at Aberdeen. It has set a deadline of 22 December 2016.

Kate Collyer, the CMA decision-maker in this case, said: “It is important that we ensure that airlines transporting passengers to and from Aberdeen Airport are protected against any reduced service quality or increased costs as a result of this merger.

“We hope that Menzies will respond to our competition concerns and ensure that effective competition between ground handling service providers at Aberdeen Airport is restored.”

Menzies responded saying it will consider its position and respond to the CMA in due course.

Managing director of Menzies Forsyth Black said: "I am delighted to acknowledge the CMA's announcement. Our team are ready to take control of the overall business and we are excited by the opportunities that exist. We will work with BBA Aviation plc and the CMA as we look to work through the issues raised in regards to Aberdeen Airport."

Menzies share price rose 0.72% to 560p at 0936 GMT on Thursday.