IAG Will Acquire Air Europa Through Spanish Subsidiary Iberia for €1 Billion
Updated: Jan 11, 2020
The International Consolidated Airlines Group (IAG) announced Monday that their Spanish subsidiary Iberia would acquire Air Europa from Globalia for €1B in cash. The transaction is part of IAG’s strategy to turn Madrid into a major rival European hub.
In today’s announcement, the International Airlines Group (IAG) stated they have agreed to purchase Air Europa through their Spanish subsidiary Iberia from parent company Globalia. The transaction will set Madrid up as a major hub rival to Amsterdam, Frankfurt, London-LHR and Paris-CDG. IAG’s goal is to re-establish itself as a leader from Europe to Latin America and the Caribbean. The acquisition is expected to be completed in the second half of 2020, with EPS accretive during the first full year and ROI accretive by the fourth year. In today’s announcement, IAG Chief Executive Officer, Willie Walsh stated,
“Acquiring Air Europa would add a new competitive, cost effective, airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South American leadership, therefore generating additional financial value for our shareholders.
IAG has a strong track record of acquisitions, most recently with the acquisition of Aer Lingus in 2015 and we are convinced Air Europa presents a strong strategic fit for this group.”
A separate Iberia Press Release stated that Air Europa would continue to compete against IAG airlines until the deal was approved by regulators and completed. Commenting on the acquisition, Iberia’s Chief Executive Officer, Luis Gallego said,
“This is of strategic importance for the Madrid hub, which in recent years has lagged behind other European hubs. Following this agreement, Madrid will be able to compete with other European hubs on equal terms with a better position in Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America.”
This year, great interest in the Latin American market has been demonstrated by major global carriers. In September, Delta Air Lines acquired a 20% stake in the leading Latin American carrier LATAM. In addition to Spanish flag carrier Iberia, IAG also owns the Spanish low-cost-carrier Vueling, British Airways, Aer Lingus and Level.
Source(s) IAG, Iberia