MADRID/LONDON (Reuters) – British Airways and Spain’s Iberia announced on Thursday a preliminary agreement for a $7 billion (4 billion pound) merger to create the world’s third-largest airline by revenue.
The deal, which the companies hope to close by the end of 2010, ends the British flag carrier’s long pursuit of Iberia to create an enlarged group, able to cope with the industry’s largest downturn in decades.
BA shareholders will have 55 percent of the new firm, with 419 aircraft flying to 205 destinations, while Iberia will hold 45 percent.
In a joint statement, BA and Iberia said the merger would provide “enhanced scale to compete with other major airlines and participate in future industry consolidation.”
The new company will combine British Airways’ strong position in Europe-to-North America traffic with Iberia’s Latin American business, and will potentially be reinforced by a planned alliance with AMR Corp’s American Airlines.
Iberia’s chairman Antonio Vazquez will be chairman of the new company, while BA’s Chief Executive Willie Walsh will be CEO. Each airline will have seven members on the new 14-member board.
BA and Iberia merge
November 13th, 2009
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