Iberia confirms the purchase of Air Europa for half the original price

Air Europa is one of Spain's leading airlines, operating domestic and international flights

The International Airlines Group (IAG) and Globalia, owner of Air Europa, announced yesterday (20) that they had amended the original agreement announced on November 4, 2019, under which IAG's subsidiary, Iberia, has agreed to acquire the entire issued share capital of Air Europa.

Under the terms of the new agreement, the parties agreed that the amount to be paid by Iberia to buy Air Europa will be reduced from €1 billion to €500 million, with payment deferred until the sixth anniversary of the completion of the acquisition.

The IAG Board of Directors continues to believe that the acquisition remains strategically important for the future of IAG and Iberia and positions the Group to benefit from growth opportunities as the industry emerges from the unprecedented impact of the COVID- 19. The acquisition benefits include:

• Increase the importance of the IAG hub in Madrid, making it a true rival for Amsterdam, Frankfurt and Paris;
• Unlock new opportunities for network growth; and
• Offer significant benefits to the customer through greater choice and scheduling flexibility and greater opportunities to earn and redeem miles.

The IAG continues to expect the acquisition to generate significant cost and revenue synergies by 2026. The acquisition constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority Listing Rules and, as such, does not require approval from IAG shareholders.