IAG is keeping alive efforts to buy Spain’s Air Europa. The owner of British Airways and Iberia has agreed a loan to Air Europa parent Globalia and exclusivity over talks for the airline.
IAG scrapped the acquisition of Air Europa via Iberia in December 2021, after the COVID-19 pandemic derailed its plans.
The airline group was still looking at ways to do a deal but revealed in February that Air Europa was considering alternatives from other European carriers. IAG wants Air Europa in order to expand its hub in Madrid.
“We remain convinced about the strategic importance of this deal to the development and competitiveness of Madrid’s hub. Since we started negotiations, the world has changed,” IAG chief executive Luis Gallego said in a stock exchange filing on March 17, 2022.
The €100 million ($111 million) seven-year unsecured loan has the option to convert into a stake of up to 20% in Air Europa, IAG said in the filing.
The agreement also gives IAG a period of exclusivity of one year while discussions take place. In addition, IAG also has the right to match any offer made by another party for the airline in the next three years.
“This agreement will give us time to evaluate with exclusivity alternative structures that may be of interest to both companies and offer significant benefits for their customers, employees and shareholders,” Gallego explained.