British Airways and Iberia One Step Closer to MergerJuly 1, 2010 By: Jena Tesse Fox
Businessweek and other sources are reporting that beleagured airlines British Airways and Iberia have moved a step closer to a $6.2 billion combination after signing the merger-plan document required to implement the transaction under Spanish law.
A new Spanish company, BA Holdco SA, will be created above British Airways and how Iberia will transfer its assets to an operating subsidiary before both are merged into the International Consolidated Airlines Group SA holding company, the UK carrier said in a statement today.
The merger, which is being implemented under Spanish law, remains dependent on the granting of shareholder approval at meetings to be held in November, with completion expected about a month later, British Airways said. Investors will receive shares of IAG, which will become the owner of both airlines. Today’s statement confirms that Willie Walsh, the UK carrier’s chief executive, will run the combined company, with Iberia’s Antonio Vazquez as chairman.
Completion of the merger also requires European Commission approval, the backing of UK regulators for a plan to cut the $5.6 billion pension deficit at British Airways and approval of that plan by Iberia before September 30.