British Airways owner IAG scraps deal to acquire Air Europa

British Airways owner IAG terminated its proposed takeover of Spain's Air Europa on Thursday, citing regulatory environment concerns, less than two months after it offered remedies to antitrust regulators to secure approval for the deal. IAG had offered concessions to the European Commission in June, after the watchdog warned the deal could reduce competition. EU antitrust regulators had been poised to block the deal after IAG declined to offer additional remedies to address their concerns, people with direct knowledge of the matter said. "It doesn't make sense for our shareholders and that's the reason we are abandoning the operation," IAG Chief Executive Luis Gallego told a press call on Thursday. Gallego confirmed that the European Commission said the concessions offered by the group were not enough. Analysts said IAG's decision was unsurprising, but prompted questions about where IAG may turn its acquisition interests in the future. Portugal's TAPis seen as a potential target for acquisition. "The shares appeared to give no premium for this getting approved," said Alex Irving, an analyst at Bernstein. IAG said it would pay Air Europa E50m as termination fee. Air Europa officials were not immediately available for comment. Air Europa owner Globalia was also not immediately available.<br/>IAG had announced last year that it would buy out the 80% of Air Europa it did not already own for E400m. The company would retain its 20% stake in Air Europa.<br/>