On Thursday, August 1, International Airlines Group (IAG) announced the termination of its deal to acquire Spanish carrier Air Europa. This decision follows concerns raised by the European Commission in April regarding competition, marking IAG’s second unsuccessful attempt to acquire Air Europa.
IAG, which owns British Airways, Iberia, Vueling, and Aer Lingus, as well as a 20 percent stake in Air Europa, initially agreed to purchase the Spanish airline in 2019 for €1 billion. However, the bid was abandoned two years later due to the Covid-19 pandemic. The group revived its acquisition efforts in February 2023, proposing a significantly reduced price of €400 million for the remaining 80 percent of Air Europa.
In a statement on Thursday, IAG said its board of directors “has concluded that in the current regulatory environment, it would not be in the best interests of shareholders to continue with the transaction.”
In contrast, European competition regulators approved Lufthansa’s proposed takeover of Italian carrier ITA Airways in July, but only after extensive negotiations and significant concessions by both the airline group and the Italian government.
As a result of backing out of the deal, IAG will pay Air Europa owner Globalia a €50 million “break fee” and will maintain its 20 percent minority equity stake in the airline.
IAG CEO Luis Gallego stated: “IAG remains committed to its strategy, including competing effectively from its Madrid hub. This is a strategy which is delivering strong results. We will continue to develop our presence in Madrid so that the hub can develop as a rival to Europe’s largest hub airports.”
