Merger To Create World's Third Largest Airline
April 9, 2010 - British Airways and Iberia have taken a further step towards creating a new leading European airline group by signing their merger agreement. The merger between the two carriers will create the world's third-largest airline in terms of revenue. The terms of the merger agreement are consistent with the binding memorandum of understanding (MOU) signed between the two airlines in November 2009.
The merger is expected to be completed in late 2010 and will benefit both airlines’ shareholders, customers and employees. The new company will be one of the world’s largest airline groups with 408 aircraft flying to 200 destinations and carrying more than 58 million passengers per year. It has been structured so that it can take advantage of further consolidation in the global aviation industry.
In March British Airways and Iberia Airlines' 5,000 pilots indicated they welcomed the merging of their two airlines but warned that they will be on their guard against one pilot group being played off against the other.
The new group will generate annual synergies of
approximately €400 million by the fifth year of the merger.
As detailed in the MOU, under the terms of the
proposed merger, British Airways shareholders will receive one new
ordinary share in International Airlines Group for every existing
British Airways ordinary share held by them and
The treasury shares held by
International Airlines Group
will have a premium listing in the
Since signing the MOU, the
airlines have refined the synergies and confirmed the principles of how
the organization will be structured. They have also received regulatory
confirmation from the
Willie Walsh, British Airways
chief executive, said: “The merged company will provide customers with a
larger combined network. It will also have greater potential for further
growth by optimizing the dual hubs of
The completion of the merger
is subject to regulatory approval from the relevant competition
authorities including the European Commission and approval by both
British Airways and
The transaction will be
implemented through a series of steps including a transfer of the
This announcement is for information purposes only and does not constitute, or form part of, any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of British Airways, Iberia or International Consolidated Airlines Group in any jurisdiction.
Securities may not be offered
or sold in the
Neither this announcement nor
any copy of it may be taken or transmitted, directly or indirectly, into
UBS is acting as financial adviser to British Airways and no one else in connection with the proposed merger and will not be responsible to anyone other than British Airways for providing the protections afforded to the clients of UBS nor for providing advice in relation to the proposed merger or any other matter referred to herein.
Morgan Stanley are acting as financial advisers to Iberia and no one else in connection with the proposed merger and will not be responsible to anyone other than Iberia for providing the protections afforded to the clients of Morgan Stanley nor for providing advice in relation to the proposed merger or any other matter referred to herein.
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