Shareholders seal BA-Iberia merger
A multi-billion-euro merger between British Airways and Iberia was sealed on Monday as shareholders overwhelmingly backed a deal to create Europe's second biggest airline.
"The shareholders of Iberia and British Airways today voted to approve the merger of the two companies," Iberia said in an official statement.
"The shareholders of the two airlines thus met the final condition for carrying out the merger, which will be officially consummated when shares of the new International Airline Group (IAG) holding company are listed for trading on stock exchanges on late January."
BA shareholders backed the deal -- worth more than 6.0 billion euros (8.0 billion dollars) -- with an overwhelming 99-percent majority.
"Without a doubt, it is a historical agreement that will create a global group to lead a future consolidation process in the airline business," said Iberia chairman Antonio Vazquez, who will become chairman of IAG.
The boards of the British and Spanish airlines agreed a deal in April, while EU competition regulators have also given the green light for a full alliance.
A merger allows the two carriers to catch up with rivals such as Air France-KLM and Lufthansa, according to analysts.
BA is set to benefit from Iberia's strong presence in Latin America, while the Spanish airline will gain from the British carrier's strength in North America.
BA chairman Martin Broughton told shareholders on Monday that the merger had a "compelling, strategic and financial logic".
A tie-up, on schedule to be completed in January, will create Europe's second-biggest airline by market capitalisation after Germany's Lufthansa, and fly about 60 million passengers a year.
BA and Iberia sought to merge as the global economic downturn and the rise of low-cost airlines resulted in steep losses for traditional carriers.
However since the tie-up announcement, the pair have overcome travel chaos due to strikes and the volcanic ash cloud to post healthy returns to profit, indicating that the sector is on a path to recovery after the deep recession.
The landmark Anglo-Spanish deal will create annual savings of around 400 million euros by the fifth year of the merger, which will see the creation of a new holding company with a primary shares listing in London.
BA will hold 55 percent of the capital of IAG and Iberia 45 percent.
BA and Iberia will each retain their current operations and individual brands.
Current BA chief executive Willie Walsh will become chief executive of the new group.
The planned merger cleared a significant hurdle when Iberia said it had decided not to exercise its right to cancel the deal over a BA employees' pensions deficit of 3.7 billion pounds (4.4 billion euros, 5.8 billion dollars).
© 2010 AFP