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IAG's Unit Iberia To Buy Spain's Air Europa For EUR 1 Bln In Cash

International Cons Airlines Group (IAG.L,BAIRY.PK,BAY.L) announced Monday that its unit IB OPCO Holding S.L. or Iberia has agreed to acquire Spanish private airline Air Europa for 1 billion euros in cash.

The company said the deal offers significant synergy potential in terms of cost and revenue. The acquisition would be earnings per share accretive in the first full year and accretive to IAG's return on invested capital by the fourth year after Completion. The acquisition is also expected to generate significant revenue synergies by 2025.

The completion of the acquisition is expected to take place in the second half of 2020 following receipt of relevant approvals.

Air Europa operates scheduled domestic and international flights to 69 destinations, including European and long-haul routes to Latin America, the United States of America, the Caribbean and North Africa.

In 2018, the airline generated revenue of 2.1 billion euros and an operating profit of 100 million euros. It carried 11.8 million passengers in 2018 and ended the year with a fleet of 66 aircraft.

Willie Walsh, Chief Executive of IAG, said, "Acquiring Air Europa would add a new competitive, cost effective airline to IAG, consolidating Madrid as a leading European hub and resulting in IAG achieving South Atlantic leadership, therefore generating additional financial value for our shareholders."

The company said the Air Europa brand will initially be retained and the company will remain as a standalone profit centre within Iberia run by Iberia CEO Luis Gallego.

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