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British Airways and Iberia sign merger deal
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April 09, 2010
Original URL: http://en.wikinews.org/wiki/British_Airways_and_Iberia_sign_merger_deal



British Airways (BA) and the Spanish airline Iberia have signed a merger
deal, which will create one of the largest air carrier groups in the
world.

The two announced the merger yesterday, and said that the deal, which
has been expected for a long time, is to be implemented by the end of
2010. The move will make a group with a market value of US$8 billion.
The deal has been negotiated since July 2008.

Under the plan, both companies keep their own brands and operations, but
will be owned by International Airlines Group, a new holding company. It
will be listed in London, but taxed in Spain.

The airlines believe the merger will save $530 million annually. In
February, BA reported a loss of $102.4 million for the final three
quarters of 2009, whilst Iberia posted an operating loss of $629
million.

Meanwhile, investors in BA will receive an IAG share for every BA share
they own, and stockholders in Iberia 1.0205 shares for each share in the
Spanish airline; thus, BA shareholders will take 55% of IAG.

"The merged company will provide customers with a larger combined
network," commented BA chief executive Willie Walsh. "It will also have
greater potential for further growth by optimising the dual hubs of
London and Madrid and providing continued investment in new products and
services."

Meanwhile, Iberia chief executive Antonio Vasquez remarked: "This is an
important step in creating one of the world's leading global airlines
that will be better equipped to compete with other major airlines and
participate in future industry consolidation."

Independent aviation specialist James Halstead said he believed the
merger was necessary for BA to remain competitive amongst other European
air carriers. "BA's unique position at Heathrow could help it survive
for a short while, but in the long run it needs more than just Heathrow.
The main point of the Iberia deal is to be able to cut costs and put the
combined company in the position that Air France-KLM and Lufthansa are
already in," he said, quoted by The Independent.

== Related news ==
* British Airways and Iberia agree to merge

== Sources ==
* http://english.aljazeera.net/business/2010/04/2010488933154288.html
* http://www.independent.co.uk/news/business/news/ba-and-iberia-agree-merger-at-last-as-airlines-fight-for-survival-1939815.html