Airline group IAG is looking for ways to revive its deal to purchase Air Europa after loaning €100 million to the Spanish carrier’s parent company Globalia.
IAG, which owns British Airways, Iberia, Vueling and Aer Lingus, pulled out of its original deal to buy Air Europa in December 2021.
But now IAG has agreed a €100 million seven-year unsecured loan to Globalia, which gives IAG a one-year “exclusivity” period to negotiate a new agreement for Air Europa.
Luis Gallego, IAG's chief executive, said: “We remain convinced about the strategic importance of this deal to the development and competitiveness of Madrid's hub. Since we started negotiations, the world has changed.
“This agreement will give us time to evaluate with exclusivity alternative structures that may be of interest to both companies and offer significant benefits for their customers, employees and shareholders.”
IAG originally announced a €1 billion deal to buy Air Europa in 2019. But this sale price was reduced to €500 million in January 2021, due to the financial difficulties suffered by the airline industry during the Covid-19 pandemic.
The deal was then dropped completely in late 2021 with IAG failing to give a reason for the decision at the time. Both EU and UK competition regulators had already announced investigations into the acquisition.
As well as the new one-year exclusivity period, IAG’s loan deal with Globalia gives it the right to match any other third-party bid received for Air Europa in the next three years.
IAG also has the option to convert the loan into a 20 per cent shareholding in Air Europa.