IAG purchases Air Europa for €500 million to be paid in 2026

The Spanish news website El Confidencial reveals this Friday that the Iberia buys Air Europa for 500 million to pay in 2026. The boards of Iberia, IAG and Air Europa have already reached an agreement to adjust the conditions of the acquisition, only pending the approval of the Government.

The boards of directors of Iberia and International Consolidated Airlines Group (IAG), the British parent company that owns the Spanish airline, have validated the purchase of Air Europa with new conditions regarding the price and the form of payment, with respect to the 1,000 million euros agreed a year ago. Iberia will pay 500 million for the airline of the Hidalgo family, which will collect this money in 2026. The operation is pending only for the State Industrial Participation Company (SEPI) to agree to resign from the appointment of the two directors because of the loan granted to rescue the Globalia subsidiary for 475 million.

The agreement was reached this Thursday, after the governing bodies of Iberia and IAG had met last Wednesday to analyse the last hour of the Brexit negotiations, given the important impact it would have on the entire group for the flight rights if the break of the United Kingdom with the European Union occurs without agreement. But, above all, to validate the negotiations led in person between Luis Gallego, IAG’s CEO since September and before Iberia CEO, and Javier Hidalgo, his counterpart at Globalia, the Hidalgo holding company.

Gallego and the son of Juan José Hidalgo, founder of the tourist group, have renegotiated the conditions of the agreement reached on November 3, 2019, to adapt it to the current situation of the sector, heavily affected by the impact of Covid-19, with a near collapse 90% of air traffic worldwide. Iberia has agreed to pay around 500 million for Air Europa, since IAG has discounted the two loans of 475 million euros granted by SEPI from the initial price. Although the Spanish-British group had proposed to pay this amount in IAG shares, which the Hidalgos could not sell in five years, the parties have finally agreed to pay the amount in cash, but in 2026.

Source: El Confidencial