Amendment Agreement for Acquisition of Air Europa

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[{"type":"text","content":"\n \n \n \n RNS Number : 2373M\n International Cons Airlines Group\n 19 January 2021\n  \n \n \n \n Amendment Agreement for the Acquisition of Air Europa\n \n \n International Airlines Group (\"IAG\") and Globalia today announce that they have amended the original agreement announced on 4 November 2019 (the \"Original Agreement\") under which IAG's subsidiary, Iberia, has agreed to acquire the entire issued share capital of Air Europa (the \"Amendment Agreement\") (the \"Acquisition\").\n \n \n Under the terms of the Amendment Agreement, the parties have agreed that the amount to be paid by Iberia for Air Europa will be reduced from an equity value of €1 billion to €500 million with payment deferred until the sixth anniversary of the Acquisition's completion.\n \n \n The revised terms in the Amendment Agreement are conditional on the satisfactory negotiation between Iberia and Sociedad Estatal de Participaciones Industriales (\"SEPI\") regarding the non-financial terms associated with the financial support provided by SEPI to Air Europa during 2020. Iberia intends to begin discussions with SEPI shortly concerning these conditions.\n \n \n Assuming satisfaction of all conditions of the Amendment Agreement and the Acquisition, completion is expected to take place in the second half of 2021. The Acquisition is still subject to approval by the European Commission.\n \n \n Strategic Rationale and Financial Impact\n \n \n The Board of IAG continues to believe that the Acquisition remains strategically important for the future of IAG and Iberia and positions the Group to benefit from growth opportunities as the industry emerges from the unprecedented impact of the COVID-19 crisis. \n The benefits of the Acquisition include:  \n \n \n · \n Increasing the importance of IAG's Madrid hub, transforming it into a true rival to Amsterdam, Frankfurt and Paris Charles de Gaulle;\n \n \n · \n Unlocking further network growth opportunities; and\n \n \n · \n Delivering significant customer benefits through providing increased choice and schedule flexibility and greater opportunities to earn and redeem miles.\n \n \n IAG continues to expect the Acquisition to generate significant cost and revenue synergies, with full run-rate synergies similar to those originally envisaged and now expected by 2026. The Acquisition is expected to be earnin...

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