EU Deepens Antitrust Probe Into Lufthansa/Austrian Deal

The European Commission Wednesday launched an in-depth investigation into Lufthansa AG's (LHA.XE) plan to buy Austrian Airlines AG (AUA.VI).

The commission deepened the probe amid worries that, unchecked, the merger could lead to higher fares and reduced choice to consumers on certain routes. The commission said that in the "absence of appropriate remedies," it had "serious doubts" whether the deal could be allowed.

The commission now has up to 90 days to decide whether to allow or block the deal.

The deal with Lufthansa is seen as key to maintaining the solvency of Austrian Airlines, which has been hit hard over the last year, first by soaring oil prices and then the global economic crisis.

Lufthansa is proposing to pay EUR4.49 a share for Austrian Airlines' outstanding shares. The takeover will also receive help from the Austrian government in the form of EUR500 million in restructuring aid, which is being scrutinized by the commission separately.

-By Peppi Kiviniemi, Dow Jones Newswires; [phone]; [e-mail]