Becoming the second largest shareholder of the airline , IAG has gained weight in Air Europa . The group has announced that it has exercised its option to exchange the group's seven-year unsecured loan of 100 million euros to Globalia for a 20% stake in the share capital of Air Europa, as notified by the listed company to the National Securities Market Commission (CNMV).
With this , the holding company that is parent to Iberia, British Airways, Vueling and Aer Lingus , takes a significant step towards the much hyped takeover with the acquisition of 100% of Air Europa , but it's too early , as much will depend on community authorizations.
Globalia already had the approval of SEPI , controlled by the Treasury, and the banking syndicate led by Santander for the loan convertible into shares with which to buy 20% of Air Europa for 100 million euros.
At present , 20% is considered a financial participation and does not give any control to Iberia over its historical rival, in exchange of the operation was forged in March , aimed at the acquisition of the company founded by Juan José Hidalgo.
The operation , where International Consolidated Airlines Group (IAG) had signed a deal with Air Europa's conglomerate owner Globalia Corporacion Empresarial SA to provide a 100 million euro ($110.3 million) seven-year unsecured loan in exchange for a potential stake of up 20% in the Spanish airline.
Prior to that , IAG had terminated the agreement signed on 4 November 2019 and amended on 20 January 2021, under which IAG’s subsidiary, Iberia, had agreed to acquire the entire issued share capital of Air Europa.
Now , IAG said Thursday that the agreement gives it time to evaluate the interest of both parties after terminating the contract for the acquisition of Air Europa in December 2021.
On March 17th 2022 , IAG had agreed to provide Air Europa's owner Globalia with a 7 year unsecured loan of €100 million. This can be converted into a 20% stake in the airline.
However , if done , Air Europa's complex integration plan in Iberia is expected to take more than a year before crystallizing , according to IAG's internal estimates.
Already , the first director of the IAG airline warned a couple of months ago that they were waiting for various competition supervisors in several European countries (United Kingdom , Germany and Spain) to give their nod to this acquisition operation.
Sánchez-Prieto, president of Iberia, said that regulators wanted to ensure that they do not take sides in the administration of Air Europa with the acquisition of that fifth of the airline. "For us it's a purely financial stake," he said.
The Spanish-British group continues to maintain exclusivity and right of first refusal in the process of buying the entire capital of Air Europa over the next three years.
On July 29th , the CEO of IAG , Luis Gallego, once again defended the importance of this operation not only for the consortium he directs , but also for the "hub" of Madrid, because it would strengthen leadership in the South Atlantic.
IAG and Iberia have insisted for months that the acquisition of Air Europa by a foreign group, such as Air France or Lufthansa, would serve to fragment the Madrid-Barajas hub and benefit competing airports in Paris, Frankfurt, London or Amsterdam.
The purchase of Air Europa by Iberia had been closed at the end of 2019 for 1,000 million euros , but Pandemic played a role , price was reduced to 500 million euros , followed by a prolonged negotiations.
Focus is , the sum of the long-haul fleets of Iberia and Air Europa, both competing so far for the Latin American market and something in the United States , would be similar to that of KLM in Amsterdam.
