International Airlines Group to acquire Air Europa for €1bn
International Airlines Group has agreed to acquire Air Europa in a deal valued at €1 billion.
The group will to acquire the entire issued share capital of the Spain-based airline through its Iberia subsidiary,
Commenting on the deal, Willie Walsh, chief executive of IAG, said: “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 Atlantic leadership, therefore generating additional financial value for our shareholders.
“IAG has a strong track record of successful acquisitions, most recently with the acquisition of Aer Lingus in 2015 and we are convinced Air Europa presents a strong strategic fit for the group.”
Air Europa is one of the leading private airlines in Spain, operating scheduled domestic and international flights to 69 destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa.
In 2018, Air Europa generated revenue of €2.1 billion and an operating profit of €100 million.
It carried 11.8 million passengers in 2018 and ended the year with a fleet of 66 aircraft.
Javier Hidalgo, chief executive of Air Europa-owner Globalia, said: “For Globalia, the incorporation of Air Europa to IAG implies the strengthening of the company’s present and future that will maintain the path followed by Air Europa in the last years.
“We are convinced that the incorporation of Air Europa to a group such as IAG, who over all these years has demonstrated its support to the development of airlines within the group and the Madrid hub, will be a success.”
The board of IAG believes that the transaction will increase the importance of its Madrid hub.
In the long-term, the company hopes to transform the base into a true rival to the big four hubs European hubs, at Amsterdam, Frankfurt, London Heathrow and Paris Charles De Gaulle.
Luis Gallego, chief executive of Iberia, 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 on Europe to Latin America routes and the possibility to become a gateway between Asia and Latin America.”
The deal will be funded by external debt and is expected to close in the second half of next year following receipt of relevant approvals.