The agreement reached by Alitalia Cai and Etihad, the national carrier of United Arab Emirates, for the acquisition of the 49% of Alitalia's shares in August 2014 came into effect on 1st January 2015. A newly incorporated subsidiary of Alitalia, which received its operating business by way of subscription of shares, thus came into existence. In fact, a minute after midnight of the first day of the new year, New Alitalia "took off" and became fully operational, after all Alitalia's assets were transferred.

As a result of this transaction, a new joint venture, New Alitalia or Alitalia Sai, has been created, and Etihad acquires sole control over Alitalia Loyalty, a subsidiary of Alitalia Cai that manages the latter's frequent flyer programme. Control over New Alitalia is jointly held by Alitalia Cai (51%) and Etihad (49%).

However, the completion of the acquisition process, which began with the partnership agreement last August, was dependent on two conditions. Firstly, the underwriting of an equity commitment of 300 million euro, along with the restructuring of 695 million euro of Alitalia's debt by Etihad. Secondly, obtaining the proper clearance by the national and European regulatory authorities, including competition authorities.

European Council Regulation 139/2004 on the control of concentrations between undertakings, i.e. the "Merger Regulation", applies to concentrations with a Community dimension, pursuant to its Article 1. The Community dimension is basically calculated in terms of aggregate turnover, either worldwide or within the Union, in accordance with the conditions of the aforesaid Article 1. The term "concentration" encompasses, in accordance to Article 3.1.b, "the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by purchase of securities or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings". Concentrations with a Community dimension must be communicated to the European Commission prior to implementation.

Etihad's acquisition of 49% of Alitalia was indeed communicated to the Commission on 29th September 2014. The Commission then undertook the usual investigation in order to examine its possible effects on competition in the internal market, in accordance with the above-mentioned Regulation. In its investigation, the Commission took into account the interests held by Etihad in Airberlin, Darwin Airline and Jet Airways.

The Commission concluded that on all affected routes, with one exception, the transaction did not raise serious competition concerns, mainly owing to the competitive pressure exerted by other carriers. However, the Commission's investigation indicated that the transaction would lead to a monopoly on the Rome–Belgrade route, where Alitalia and Air Serbia are the only carriers offering direct flights.

In order to dispel the Commission's competition concerns, Alitalia and Etihad submitted commitments to release up to two daily slot pairs at Rome-Fiumicino and Belgrade airports to interested new entrants. The airlines also committed to providing further incentives, such as the possibility of a new entrant to acquire grandfathering rights after a fixed period of time. Furthermore, Alitalia and Etihad committed to offering a special prorate agreement, a fare combinability agreement, an interline agreement and access to their frequent flyer programme to new entrants.

The possibility for the involved parties to offer voluntary commitments with a view to rendering the concentration compatible with the common market, and thus acceptable for the Commission, is set out in the Merger Regulation, article 6.2. The Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 ("Remedies Notice") provides companies with further guidance on the different types of commitments accepted, the procedure for their submission and the requirements for their implementation.

On 14th November 2014, the Commission cleared the proposed acquisition of joint control over New Alitalia by Alitalia Cai and Etihad under the Merger Regulation. A decision pursuant to Article 6.1.b of the Merger Regulation was therefore issued, with the commitments submitted by the airlines and accepted by the Commission attached as an annex, pursuant to Article 6.2. The acquisition of joint control over New Alitalia was declared compatible with the internal market and the functioning of the EEA (European Economic Area) Agreement.

Nonetheless, it must be noted that clearance is conditional upon Alitalia's and Etihad's commitments, pursuant to Article 6 of the aforesaid Regulation. In that regard, in December 2014, the Commission approved the appointment of a Monitoring Trustee for this case, whose role is to monitor the compliance of Alitalia and Etihad with the commitments attached to the Commission's decision and to report to the Commission thereon.

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