IAG, the International Airlines Group, has agreed to acquire 80% of Air Europa shares and complete the total acquisition of the Mallorca-based airline.
The acquisition, which will see Iberia take over Air Europa, has been on the cards since before the pandemic. It stalled because of Covid and also because of regulators' competition concerns. In August last year, IAG acquired 20% of Air Europa shares, the conversion of an extraordinary loan of 100 million euros. The remaining 80% are valued at 400 million. The Hidalgo family, owners of the Globalia group, of which Air Europa is a part, had originally been looking for 1,000 million euros. The value was lowered partly because of the pandemic but also because of loans to Air Europa and the airline's debts.
Spain's National Securities Market Commission has been informed of the intention to acquire, with IAG saying that the first 200 million euros will be paid when approval is given by the competition authorities. For IAG, Air Europa is considered to be a strategic acquisition in providing growth opportunities in Latin America, the Caribbean and Asia.
The final agreement is subject to regulatory and other approval, which could yet take around 18 months.