Chief executive Willie Walsh confirmed a number of hurdles had been overcome, including
the BA’s pension deficit and the chairman and chief executive roles. Most importantly, the share of ownership has also been agreed - this was earlier seen which as the biggest challenge due to the recent slump in BA’s share price, leading to Iberia pushing for an equal equity split. BA and Iberia plan to create a single parent holding company, Topco, that would own the two airlines, allowing the carriers to operate largely independently and retain their brands, but make estimated synergies of £400 million.
Walsh is expected to remain as chief executive of Topco while Fernando Conte, the head of Iberia, is likely to become chairman.
However, Walsh said there remained one outstanding issue - the agreement on how the merged parent company would control the two airlines.
Mr Walsh told The Times: “The single area of difficulty between us relates to governance and specifically the financial control that Topco can exercise over the two operating companies. The only way you can guarantee the synergies is if Topco can exercise financial control.”
When the deal was first announced last summer, BA’s shareholders would have owned nearly 70 percent based on market capitalisation. But this fell to 50 per cent as BA’s share price collapsed.
According to The Times, the deal could be brokered with a split of 55:45 to BA, although it is unknown whether BA’s shareholders will find that acceptable.