The IAG group reaches an agreement with the Hidalgo family one month after the end of the negotiation period
After four years since the proposed acquisition of Air Europa by the IAG group – to which Iberia belongs – was first announced, the operation has been approved by both management committees.
Just one day before IAG presents its 2022 results to investors and analysts this Friday, the Globalia board (group of the Hidalgo family that owns Air Europa) have accepted the conditions to close an operation that last year already marked the purchase of 20% of the airline for 100 million euros.
An operation that would have been closed for around 500 million euros, half of what was announced in 2019 when the valuation was much higher without the impact on the accounts of the pandemic. Such was the collapse of Air Europa that it had to request a rescue from the State (SEPI) for 475 million euros in 2020.
The company explained in a statement that the agreement involves the acquisition by IAG of the remaining 80% of Air Europa for 400 million euros. IAG had previously paid 100 million for 20% of Air Europa, so the total operation amounts to 500 million euros for the company.
Upon receipt of approval from the European competition bodies, the first payment of 200 million euros will be made, 100 million in cash and 100 million in IAG shares (at the price set at the signing of this agreement), which will make Globalia is a major shareholder of the IAG group.
The other two payments, of 100 million euros each, will be made on the first and second anniversary, respectively, of the approval by the Competition, according to sources from the organization.
Of course, the agreement is subject to the approval of the competition authorities, as well as the SEPI and the ICO. Likewise, it establishes a compensation of 50 million euros as a ‘breakup fee’ in the event that the acquisition could not materialize. Until the aforementioned approval is obtained, both companies will continue to compete as to date, they say from IAG.
“This operation reinforces the value of the company and demonstrates the solidity of the Air Europa project,” say the same sources, which indicate that this news will have a “great scope” for the promotion of the strategic ‘hub’ of Madrid-Barajas . From IAG they assure that the project will allow consolidating the offer for air connectivity between Europe and America, especially with Latin America and the Caribbean region, where Air Europa has a wide network of destinations and a solid presence and recognition, establishing, in turn, , a strong link from the Americas to Asia and the Middle East. “This will allow Spain to compete on an equal footing with other European connection hubs and will contribute not only to accelerating economic development on both sides of the Atlantic, but also to the recovery of the tourism industry with the implementation of a new model, more innovative, sustainable and profitable”.
Jesús Nuño de La Rosa, CEO of Air Europa Holding, assured in a statement that the agreement reached with IAG “endorses the success of the plan carried out to consolidate Air Europa as an international reference after the pandemic, demonstrating its viability and good work, before and after the biggest crisis in the aeronautical sector».
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