British Airways owner IAG to buy rest of Spanish budget airline Vueling for $144 mn
09 Nov 2012
International Airlines Group (IAG), the owner of British Airways and Iberia, today offered to buy the remaining shares it does not already own in Spanish budget airline Vueling, for €113 million ($144 million).
IAG's Iberia, which already holds a 46-per cent stake in Vueling, has offered to pay €7 a share in cash, a 28-per cent premium to the company closing price on 7 November.
IAG, formed through the 2011 merger of British Airways and Iberia, said that the takeover, which values Vueling at about €209 million, will not require regulatory approval from the European regulator.
Vueling, Spain's second largest carrier by number of passengers flown, is a low-cost carrier and operates flights to 74 domestic and European destinations from its base in Barcelona.
In 2009, Vueling acquired rival Spanish low-cost airline Clickair to become the second largest Spanish carrier flying to almost 50 destinations.
Vueling has recently increased capacity and is profitable, despite the deteriorating Spanish economy and has benefited after the January closure of loss-making airline Spaniar.
IAG chief executive Willie Walsh said, "With its leading position in Barcelona, European growth strategy and low cost base, Vueling has much to offer IAG. It has significantly increased capacity while remaining profitable, despite the Spanish economic slowdown, and already has extensive commercial arrangements with Iberia. We would plan to retain the current Vueling management team.''
"This would be good news for Vueling as there are many advantages for the airline in this deal. It will benefit from the financial strength of a larger airline group, making it better able to compete with other airlines and invest in new customer products and services. The airline will also be able to generate some cost and revenue synergies as part of IAG mainly through joint financing and procurement,'' he added.
