Iberia's board of directors has concluded the acquisition of Air Europa for the amount of 500 million euros, which will be paid in 2026, according to an agreement already signed with Globalia, confirmed sources inside Efe and Europa Press.
Air Europa faced the economic crisis caused by the COVID-19 pandemic and was the first company to request government aid.
With the fleet of planes detained on the ground for weeks and operating "empty" since May, Air Europa faced the lack of revenue and became the first Spanish company to apply for public bailout through the aid fund for strategic companies affected by the pandemic, managed by the Sociedad Estatal de Participaciones Industriales (SEPI) - which in October 2020 promised to inject 475 million euros into Air Europa.
At the time, the agreement was awaiting approval by the competition authorities, but the outbreak of the coronavirus pandemic turned the economic and business scenario upside down, completely changing the agreement between the parties.
This agreement represents a 50% reduction compared to the initial € 1.000 million agreement that Luis Gallego (CEO of IAG and President of Iberia) and Javier Hidalgo, (President of Globalia, the holding company to which AirEuropa belongs), in November 2019.
After months of negotiations, the two companies have signed the new acquisition agreement, worth 500 million euros that will be paid in 2026. Experts believe that the aviation industry will recover by 2023, so the deadline has been set at three years. from the date on which it is estimated that this sector could overcome the ravages caused by the pandemic.
Following the acquisition of Air Europa, Iberia will control the hub at Madrid-Barajas Airport.
Another issue was SEPI's foray into Air Europa's shareholding. Following discussions that took place on September 8, 2020, Luis Gallego made it clear that Iberia's intention was to take over Air Europa, as it did with the rest of the previously merged companies.
Another change that Iberia needs to adapt to the needs of the new market in the industry will be the adjustment of the number of employees, both within Air Europe and within Iberia.
The rescue agreement signed by SEPI took into account the participation of the public body in the shareholding. In fact, on 23 December, Air Europe's Board of Directors already approved the appointment of two directors to represent the public body. The company had to appoint a new CEO, but he had to be accepted by the Hidalgo family - one of the richest and most influential families in Spain.