British Airways and Spanish carrier Iberia have agreed to merge in all-share deal to create a combined entity of €15 billion in revenues.
Under the terms of the agreement, British Airways will hold 55 per cent in the new entity-Top Co- and the rest will go to lberia.TopCo would be registered in Spain but will have the financial headquarters in London. The new firm will be listed on London Stock Exchange. The boards of the two firms have entered into an MoU for the proposed merger. A joint statement from the two said there would be parity at board and management level.
“The airlines believe there is a compelling strategic rationale for the transaction, which is expected to generate annual synergies of approximately €400 million, and benefit both companies ‘shareholders, customers and employees,’ the statement said. The announcement comes at a time when the global aviation industry grappling with the worst crisis it has ever faced.
The British Airways Chief Executive, Mr Willie Walsh, said, “The merger will create a strong European airline well able to compete in the 21st century, both airlines will retain their brands and heritage while achieving significant synergies as a combined force.”
Post merger, which is expected to be completed in late 2010, the combined group will offer customers connections to 205 destinations and would have a fleet of 419 aircraft.
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