Iberia buys Air Europa for a cut-price 500 million euros
Iberia, an airline of the International Airlines Group (IAG), has confirmed the purchase of Air Europa from the Globalia group for a reduced amount of 500 million euros to be paid over five years, the two companies announced yesterday.
The purchase and sale will be finalised today and means there has been a 50% reduction in the price compared to the amount initially agreed in November 2019, when the value of the transaction was a billion euros.
As business analysts anticipated, the new terms of the agreement have arisen due to the situation of the travel industry because of the Covid-19 pandemic, which has led both companies to renegotiate the initial conditions of the sale.
The final agreement comes after the rescue fund for solvent strategic companies affected by the pandemic, managed by the Sociedad Estatal de Participaciones Industriales (SEPI), h agreed to rescue the Globalia subsidiary with a aid of 475 million euros.
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On December 23rd, the Board of Directors of Air Europa approved the appointment of two directors from the State Company for Industrial Participations (SEPI), as agreed in the terms of the rescue package, and a new CEO of Air Europa, another of the points planned when giving financial support to the airline a month and a half ago, remains to be appointed by common agreement between SEPI and Air Europa .
The rescue of Air Europa was the first operation financed by the SEPI fund, endowed with 10 billion euros and designed for solvent and strategic companies in the Spanish economy, whose businesses are in danger due to the pandemic.