Friday , March 29 2024
Home / Markets / IAG Agrees to Buy Air Europa for Half of Previous Price

IAG Agrees to Buy Air Europa for Half of Previous Price

Summary:
In their announcement, IAG mentioned that Air Europa currently has 52 aircraft at their disposal, which is16 fewer than the day the deal was initially made.The International Consolidated Airlines Group SA (LON: IAG), the owner of British Airways, has agreed to purchase Air Europa Lineas Aereas SA through Iberia Airlines nearly two years later after announcing their intention. The new deal will see IAG acquiring the Spanish airline for a cut-price deal of 7 million.The owner of Air Europa, Globalia Corporacion Empresarial SA will see all of its shares completely acquired by IAG in a deferred payment until the sixth anniversary of the conclusion of the deal.“Being part of a large group is the best guarantee to overcome current market challenges which will also benefit Air Europa once the

Topics:
<title> considers the following as important:

This could be interesting, too:

Aayush Jindal writes Bitcoin Cash Analysis: Bulls Aim For 0 or Higher

Chayanika Deka writes USDT Transaction Volume Soars on TRON DAO, Hits 2 Million Daily

Wayne Jones writes Ethereum Hits 1 Million Validators Prompting Community Concerns

Dimitar Dzhondzhorov writes Ripple (XRP) Bashed by Forbes: Cardano’s Charles Hoskinson Responds

In their announcement, IAG mentioned that Air Europa currently has 52 aircraft at their disposal, which is16 fewer than the day the deal was initially made.

The International Consolidated Airlines Group SA (LON: IAG), the owner of British Airways, has agreed to purchase Air Europa Lineas Aereas SA through Iberia Airlines nearly two years later after announcing their intention. The new deal will see IAG acquiring the Spanish airline for a cut-price deal of $607 million.

The owner of Air Europa, Globalia Corporacion Empresarial SA will see all of its shares completely acquired by IAG in a deferred payment until the sixth anniversary of the conclusion of the deal.

“Being part of a large group is the best guarantee to overcome current market challenges which will also benefit Air Europa once the transaction is completed,” said Luis Gallego, the Chief Executive of IAG when announcing the deal.

The root of the deal goes back to November 2019, before the Covid-19 pandemic came to global notice. IAG announced their decision to acquire the top Spanish airline for €1 billion. The deal expected to be finalized by the second half of 2021 will still require the approval of the European Commission to roll out. The deal comes with several benefits since IAG already has a presence in Spain with its Iberia airline and Vueling airlines, a low-cost carrier in Spain. They will take advantage of the existing route to South America to gain exposure.

In their announcement, IAG mentioned that Air Europa currently has 52 aircraft at their disposal, which is16 fewer than the day the deal was initially made. Also, there was a $1.9 billion Air Europa lease liability. It was mentioned that they made a revenue of $2.5 billion in 2019, $86 million in operating profit, and $51 million in pre-tax profit. Unfortunately, the emergence of the Covid-19 pandemic forcing countries to put restrictions on air travel affected the company with about a 70% decrease in passenger volume in 2020.

Air Europa has been on the support of Sociedad Estatal de Participaciones Industriales (SEPI), a Spanish State-Owned Industrial Holding Company throughout the pandemic. IAG which had disclosed its intention to purchase the airline was also in a tight financial condition forcing them to lay off workers to survive coupled with obtaining €2.7 billion from investors. The Imposed deferral has been said to give Air Europa enough time to sort out the loan obtained from SEPI. In 2021, the net cash outflow from the deal has been said to be minimal due to the impact of the air travel restrictions.

Gallego in a statement said that both IAG and Iberia are proving their resilience in the face of the worst crisis in aviation history. The larger part of 2020 was almost flat for the Aviation industry with companies dealing with huge losses and thousands of employees losing their jobs. This deal is a good indication of the recovery that is hitting the industry after their deepest challenge.

Business News, Deals News, Market News, News, Technology News
John K. Kumi

Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.

Leave a Reply

Your email address will not be published. Required fields are marked *