International Airlines Group (IAG), the parent company of British Airways, has announced it aims to buy the remaining 80% of Air Europa it does not already own.
The deal, which is subject to regulatory approval but not that of IAG shareholders, is to give the group increased access to Latin America and Asia, it said in a note to the London and Spanish stock exchanges.
IAG's offer of €400 million includes €200 million upon closing, comprising €100 million in IAG ordinary shares and €100 million cash, to be followed by a further tranches €100 million payable in cash on the first and second anniversaries of closing. The deal followed the conversion of a a €100 million IAG loan to parent company Globalia to a 20% stake in the carrier.
Air Europa's "well-recognised" brand is to be retained but placed under the management of Iberia, the IAG-owned Spanish flag carrier, as part of a plan to transform the group's Madrid hub "to compete with Europe's largest".
IAG said Air Europa carried 13.1 million passengers in 2019, 4.3 million in 2020, 5 million in 2021 and 10 million in 2022. It has a fleet of 50
aircraft with 15 aircraft on order via aircraft lessors.
In 2021, the carrier reported revenue of €897 million, an operating loss of €287 million and pre-tax loss of €330 million, leaving it with gross assets of €928 million at the end of the year. 2022 results were not available at time of writing.