Three years and a few months after the initial purchase announcement, Iberia has completed the acquisition of Air Europa with the Hidalgo family, a step confirmed by both companies. The deal secures the remaining 80 percent of Air Europa for €400 million, following an earlier payment of €100 million for 20 percent in August, totaling €500 million to date.
Subject to competition authority approval, an upfront payment of €200 million will be made upon clearance. This sum includes €100 million in cash and €100 million in IAG shares, valued at the price in place at signing. The arrangement strengthens Globalia’s stake in the IAG group. The remaining two €100 million installments are scheduled for the first and second anniversaries of formal approval by the competition bodies.
The agreement awaits clearance from competition authorities as well as oversight by SEPI and ICO. It also provides a €50 million indemnity as a departure fee should the purchase fail to materialize. Until approval is granted, both companies will continue to operate independently as they have been doing.
The IAG group initially agreed to acquire Air Europa for €1,000 million in November 2019, but the pandemic disrupted the plan. The coronavirus crisis led to heavy travel restrictions and a downturn in airline finances. Air Europa required a €475 million government bailout from the Spanish state and an ICO loan. A €140 million adjustment was part of Iberia’s reconsideration of the deal in January of the following year, reducing the potential cost to €500 million, to be paid over five years.
In the subsequent months, as traffic began to rebound, the deal gained momentum. Iberia renegotiated terms by paying €75 million to the Hidalgo family, exceeding the initial contractual €40 million in the event of breach, to secure a renewed agreement during the European Commission phase in January. In March of the prior year, Iberia, together with its sister brands British Airways and Vueling, extended an unsecured loan of €100 million to Globalia for seven years. A potential conversion of up to 20 percent into equity was contemplated at that time, bringing Air Europa closer to a full consolidation under Iberia. The final steps were completed this Thursday, marking a significant milestone for the group and its strategy in the European aviation market.