British Airways, Iberia shareholders back $8 billion merger

Reuters, Tuesday 30 Nov 2010

British airways and Iberia will become International Airlines Group when the merger is completed January

British Airways (BA) and Spain's Iberia got shareholders' stamp of approval for their $8 billion merger, opening the door to their plans to buy up other players in the airline sector.

The two firms, which announced merger plans in April, said investors had backed the combination at separate meetings on Monday.

BA and Iberia will become International Airlines Group (IAG) when the deal is completed in late January. Shares in the new company, which will have a combined market value of around $9 billion, will be listed in London and Madrid.

The two airlines recently said they had identified 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 downplayed concerns about Spain's economic problems and highlighted the strength of Iberia's Latin American network.

"This merger is good news for passengers in the long-term," Travelsupermarket analyst Peter Smith said.

"The network of destinations available when booking with BA will increase by around 40 percent as Iberia's extensive Latin American, Spanish Caribbean and Spanish routes are incorporated into the overall offering."

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