SHAREHOLDERS at British Airways (BA) and Spanish carrier Iberia rubber-stamped a £5m merger yesterday, allowing the pair to create a major player that will compete with rivals Lufthansa and Air France-KLM.
More than 99 per cent of BA’s shareholders at a meeting in London yesterday backed the deal, meaning the new International Airlines Group is on track to start trading on the London Stock Exchange on 24 January as well as listing in Madrid.
The two airlines recently said they had already identified 12 possible acquisition targets to pursue once they have merged, with Asia seen as a key region for expansion.
“I think we have a magnificent vehicle to be in the driving seat of sector consolidation,” Iberia chairman Antonio Vazquez told reporters after its shareholders’ meeting in Madrid, but said the company was not yet in talks with any potential partners.
BA chief executive Willie Walsh also said the enlarged firm would pursue further consolidation in the industry.
The new firm will have more than 400 aircraft on 205 routes, with a staff of more than 60,000. The two companies carry close to 60m passengers a year, with joint revenue of around £12bn.
The airlines also estimate they can make €400m (£337m) of synergy savings within five years, while keeping the separate carrier brands. The firm will be headquartered in London and registered in Madrid.
Walsh will head the combined group, with chief financial officer Keith Williams moving up to become chief executive of BA.
Shares in BA closed down 3.9 per cent yesterday at 261.2p.
TIME LINE | BRITISH AIRWAYS’ MERGER WITH IBERIA
● 18 July 1997
Iberia confirms preliminary deal on a co-operation pact with BA.
● 27 October 1998
BA takes a stake in Iberia alongside American Airlines parent AMR Corp. Spanish state holding company SEPI, which owned Iberia at the time, says the deal was for BA to buy a stake of 8.2 to 9.1 per cent.
● 10 December 2003
BA and Iberia win European Commission approval to operate a proposed alliance in the EU.
● 15 November 2006
BA buys American Airlines’ stake in Iberia for €19m raising its stake in the Spanish carrier to about 10 per cent.
● 30 March 2007
Texas Pacific Group makes a €3.4bn bid approach for Iberia, which BA says it will not contend, but withdraws eight months later.
● 14 August 2008
BA, American Airlines and Iberia announce they have agreed to a transatlantic tie-up.
● 9 July 2009
Antonio Vazquez replaces Fernando Conte as Iberia chairman, an appointment seen as boosting the chances for a merger.
● 12 November 2009
BA and Iberia announce a preliminary agreement and look to close the deal by the end of 2010.
● 14 December 2009
BA reveals a £3.7bn pension deficit, which becomes a stumbling block in the merger talks.
● 8 April 2010
BA and Iberia sign a £5bn merger to create the world’s biggest airline, after agreeing to tackle BA’s pension problem.
● 29 November 2010
BA and Iberia shareholders agree the merger at separate extraordinary general meetings.