Airplanes. Iberia pays 75 million to Air Europa
Compensation for non-merger. Within February new proposal
An agreement signed in 2019 between the aviation group International Airlines Group (Iag) -which controls the Spanish air carrier Iberia- and the company Globalia -which controls the Iberian airline Air Europa- committed to the purchase of all the shares of Air Europa, under penalty of compensation. The recent rejection by the Spanish antitrust authorities has therefore resulted in Iberia having to pay 75 million Euros for the non-merger.
"It is very disappointing that we had to terminate the current deal to acquire Air Europa, but the decision makes sense given market conditions, the deep crisis resulting from covid-19 and given our desire to maintain a disciplined approach to capital allocation. However, we are committed to exploring new alternatives with Globalia that could generate significant benefits", Iag Ceo Luis Gallego said yesterday.
However, Iag's acquisition of Air Europa was never a sure thing. Far from it. On the occasion of the presentation of the last quarterly report, the executive had admitted to being "less optimistic than before", so much so that the price had dropped from 1 billion Euros to 500 million due to the pandemic impact. However, in spite of the three-way stranglehold Globalia-Spanish government-antitrust, Iag continues to cultivate the dream of owning all the airlines based in Madrid: Iberia, Vueling and Air Europa.
Now. After having agreed yesterday the compensation with Globalia for the breaking of the initial agreement, Iag has informed the Spanish Comisión Nacional del Mercado de Valores (Cnmv) that it is studying an alternative to crown the pact. By February, a new proposal will have to be submitted to the scrutiny of Brussels, after the Commissioner for Competition, Margrethe Vestager, had found that "the merger would have negatively affected internal competition, short and long haul routes to and from Spain".
On the same subject see also the article published by AVIONEWS.
AVIONEWS - World Aeronautical Press Agency