IAG agrees to buy 80% stake in Air Europa for 400 mln euros

Iberia-owner International Airlines has agreed to pay E400m to Spain's Globalia for the remaining 80% of airline Air Europa it did not already own, the company said Thursday. IAG, which also owns British Airways, said the deal will allow it to improve its position in the Latin American market and expand into Asia, while allowing its Madrid hub to compete with other major airports in Europe. Air Europa, which will maintain its brand but will be managed by Iberia, owns 50 planes and has a further 15 on order, the company said. Its fleet consists of Boeing 787 Dreamliners and Boeing 737s, Globalia said in a separate statement. IAG said the acquisition will allow it to achieve significant cost cuts that it expects to bear fruit between 2026 and 2028 if the deal is finalised in the next 18 months. It said the first E200m will be paid once the deal gets the go-ahead from antitrust authorities. Another E100m will be paid in IAG shares while the final E100m will be paid in cash. Many of Europe´s legacy airlines, hampered by weak balance sheets, are struggling to compete with budget airlines. That will inevitably lead to a period of consolidation, Ryanair CEO Michael O'Leary told Reuters earlier this month.<br/>