IAG International Airlines Group (IAG) is in advanced talks with Air Europa parent Globalia to halt the long-planned acquisition of its rival, the group revealed today (15 December) in a brief disclosure to the Madrid Stock Exchange.
“International Airlines Group and Globalia confirm today that negotiations to terminate the agreement signed on November 4, 2019, and amended on January 20, 2021, are at an advanced stage, according to which IAG’s subsidiary Iberia had agreed to acquire all of the issued capital shares of Air Europa. A new update will be made in the future, as appropriate,” the group’s chief financial officer, Stephen Gunning, said in the filing.
IAG had agreed to purchase Air Europa in 2019 for €1 billion, but the price was cut to €500 million due to the pandemic.
Possible veto by European Commission
According to sources quoted by Spanish news outlet El Confidencial, Iberia and Air Europa have agreed to suspend the deal to give themselves time to renegotiate the merger and avoid a possible veto by the European Commission, who would have insisted on significant concessions from IAG before the deal was concluded on 4 January, 2022.
The sources claimed that IAG had agreed to pay Air Europa €75 million to release it from the contract. By paying such a large penalty, Iberia grants itself a preferential right to resume talks with Air Europa once the pandemic is over, the paper speculated.
