BA, Iberia reach deal to merge
November 16, 2009 | Online Travel
British Airways and Iberia agreed to create one of the world's largest airlines, culminating more than 15 months of negotiation. The combination, which still could take another year to close, would create a new European carrier with annual revenue of about €15 billion.
BA and Iberia will continue to exist as brands and operating companies, maintaining their hubs in London and Madrid, said BA Chief Executive Willie Walsh, who will run the new company. Current Iberia Chairman Antonio Vázquez will be chairman, and BA Chairman Martin Broughton will be deputy chairman.
Current BA shareholders will own 56% of the new company, while Iberia stockholders will own the rest.BA and Iberia each will designate three nonexecutive directors.
Mr. Walsh said the merger should increase profit by €400 million in the fifth year after the deal closes. Two-thirds of the boost would come from cost savings and one-third from increased revenue, he said.
Get the full story at The Wall Street Journal
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