Iberia owner IAG poised to cancel takeover of Spanish rival Air Europa
IAG, the owner of BA and Iberia, is poised to cancel its acquisition of Spanish airline Air Europa after regulators raised competition concerns over the E500m deal. With the travel outlook darkening, IAG said it was in advanced discussions to terminate the agreed purchase with Spanish tourism conglomerate Globalia. In response, the Spanish government said it regarded Air Europa as a “strategic company for Spain due to its importance for the aviation and tourism sectors”. Madrid added that it had “made its intentions clear from the outset [of the pandemic] by lending its support” for the carrier. So far the Spanish state has made more than E600m in aid available to Air Europa. IAG’s CE Luis Gallego admitted last month he had become “less optimistic” the deal would happen after EU and UK regulators announced antitrust inquiries. The company initially agreed to pay E1b for the airline, which runs domestic and international flights including to the Americas, in a deal originally signed in late 2019 before the pandemic. It was reduced to E500m in January, with payments deferred for six years, after the pandemic hit IAG hard as it ran up billions of euros of losses. The proposed tie-up was the final act in IAG’s decade of expansion under former chief executive Willie Walsh, and would have strengthened its position in the market for transatlantic flights to South America, and helped turn Madrid airport into a significant European hub. But the proposed agreement raised concerns from the EU Commission and the UK’s Competition and Markets Authority. European officials feared the potential loss of competition and the negative effect on rivals on a number of long- and short-haul routes.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2021-12-16/oneworld/iberia-owner-iag-poised-to-cancel-takeover-of-spanish-rival-air-europa
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Iberia owner IAG poised to cancel takeover of Spanish rival Air Europa
IAG, the owner of BA and Iberia, is poised to cancel its acquisition of Spanish airline Air Europa after regulators raised competition concerns over the E500m deal. With the travel outlook darkening, IAG said it was in advanced discussions to terminate the agreed purchase with Spanish tourism conglomerate Globalia. In response, the Spanish government said it regarded Air Europa as a “strategic company for Spain due to its importance for the aviation and tourism sectors”. Madrid added that it had “made its intentions clear from the outset [of the pandemic] by lending its support” for the carrier. So far the Spanish state has made more than E600m in aid available to Air Europa. IAG’s CE Luis Gallego admitted last month he had become “less optimistic” the deal would happen after EU and UK regulators announced antitrust inquiries. The company initially agreed to pay E1b for the airline, which runs domestic and international flights including to the Americas, in a deal originally signed in late 2019 before the pandemic. It was reduced to E500m in January, with payments deferred for six years, after the pandemic hit IAG hard as it ran up billions of euros of losses. The proposed tie-up was the final act in IAG’s decade of expansion under former chief executive Willie Walsh, and would have strengthened its position in the market for transatlantic flights to South America, and helped turn Madrid airport into a significant European hub. But the proposed agreement raised concerns from the EU Commission and the UK’s Competition and Markets Authority. European officials feared the potential loss of competition and the negative effect on rivals on a number of long- and short-haul routes.<br/>
