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BA in merger talks with Iberia

British Airways has confirmed it is in merger talks with Iberia after failing in a takeover bid for the Spanish carrier as head of a private-equity buyout last year.

The merger deal would involve a share swap. BA already has a stake of just over 13% in Iberia and the Spanish airline announced today that it has taken a 3% stake in BA.

The carriers’ networks would compliment one another without the need for substantial restructuring, with BA a major player across the North Atlantic and dominant at Heathrow and Iberia the biggest carrier between Europe and Latin America.

The UK airline is also poised to seek anti-trust immunity in the US for its alliance with American Airlines, which would allow the pair to co-ordinate fares and services.

BA chief executive Willie Walsh said: “The aviation landscape is changing and airline consolidation is overdue. The combined balance sheet, anticipated synergies and network fit make a merger attractive, particularly in the current economic environment. We are confident both companies’ shareholders would benefit.”

Iberia chairman and chief executive Fernando Conte said: “We have worked together for nearly 10 years and a tie-up would build on that success and develop Madrid’s position as the European gateway to Latin America.”

Both parties are confident of securing regulaory approval.

 

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