BA and Iberia announce merger
November 13th, 2009 by Rob | Filed in Air TravelBritish Airways and Spain’s Iberia have announced an agreement for a £4 billion merger to create the world’s third-largest airline.
The deal is expected to be formalised in the first quarter of next year and closed towards the end of 2010. The merger will see BA shareholders holding 55 percent of the new company while Iberia will hold 45 percent.
The newly created holding company, which will own the two airlines, will continue to let the airlines keep their own licences, codes and brands for the first five years of the merger. So the British Airways brand will not disappear just yet!
The new company will combine British Airways’ strong position in transatlantic traffic with Iberia’s Latin American business, with 419 aircraft flying to 205 destinations.
The firms said the planned merger will lead to about 400m euros (£350m) of cost savings – a welcome relief to shareholders after both companies have recently posted major losses.
Ahead of the announcement of a deal, BA shares closed 7.5 percent higher at 206.8 pence, while Iberia shares ended up 11.8 percent at 2.22 euros.


