DUBLIN — The Irish government announced Tuesday it won’t sell its 25 percent stake in Aer Lingus to Ryanair because a merged airline would be likely to undermine competition and jobs.
The decision by Ireland’s full Cabinet makes it harder for Dublin-based Ryanair to acquire its main Irish competitor. But in a typically defiant response, Ryanair said it still expected to take over Aer Lingus and didn’t need the government’s support.
Ryanair is Aer Lingus’s biggest shareholder with a 30 percent stake. In June, Ryanair launched its third hostile takeover bid since 2006, offering $1.72 per share, a 38 percent premium over Aer Lingus’s market value and representing a potential $225 million windfall for Ireland’s cash-strapped government.
Irish Transport Minister Leo Varadkar said the Ryanair offer ‘‘does not satisfy our concerns about connectivity, competitiveness, or employment for Ireland.’’