IAG to Pay Globalia €75 Million Break-Fee for Termination of Air Europa Acquisition
International Airlines Group (IAG) has officially announced the termination of the agreement signed on November 4, 2019 and amended on January 20, 2021, under which Iberia was to acquire the entire share capital of Air Europa.
On Thursday (December 16, 2021), the International Airlines Group (IAG) announced the official termination of the agreement to acquire Air Europa. Under the original agreement, which was signed on November 4, 2019 and amended on January 20, 2021, IAG’s Iberia subsidiary had agreed to acquire the entire share capital of Air Europa. In addition to the previously agreed break-fee of €40 million, IAG will pay Globalia (Air Europa’s parent company) an additional €35 million to avoid any acquisition-related litigation. Both parties have agreed that the aggregate €75 million will be applied to reduce any future purchase price, should a new agreement be reached.
In today’s announcement, IAG’s Chief Executive, Luis Gallego, said,
“It is very disappointing that we have had to terminate the current agreement to acquire Air Europa but the decision makes sense due to the market conditions, the deep crisis resulting from COVID‐19 and taking into account our desire to maintain a disciplined approach to capital allocation. However, we have committed to analyze alternative arrangements with Globalia that could deliver significant benefits. In the same way, we will continue to work with the Spanish Government to guarantee the connectivity of Spain and the development of the Madrid hub.
“As it has for the last 94 years, Iberia will continue to carry out its mission to connect Spain with the world, working hard to strengthen and develop the Madrid hub so that it can compete as an equal with the other European hubs.”
As previously mentioned, IAG has reached an understanding with Globalia to evaluate, before the end of January 2022, possible alternative structures that may be of interest to both companies, and which could offer substantial benefits to shareholders, customers and employees.
Source: International Airlines Group (LEI: 959800TZHQRUSH1ESL13)