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BA and Iberia sign merger contracts

Thu 8th Apr 2010

The contract signing between British Airways and Iberia has finally taken place – eight days later than the deadline they set themselves and documents the terms and conditions that they agreed between themselves in November of last year. The partnership will now rename themselves as IAG – International Airlines Group, however as just the name of the holding company – the 2 separate brands are expected to remain unchanged.

The merger itself is expected to be finalised within the next 6 – 8 months, and a statement made by Iberia to the National Council for Market Values, and Spanish regulatory body, mentions how the merger ‘will benefit shareholders, clients, and the employees of both airlines'.

IAG will become one of the largest airlines in the world, with a fleet of 408 planes flying to 200 destinations and carrying an estimated 58 million passengers every year.

Antonio Vázquez - the current chairman of Iberia will become the President of the new group, while Willie Walsh from BA will become the C.E.O. with the other seats on the board to be shared equally. Walsh has commented that the resulting airline will offer a wider network to its clients, and have greater potential for future growth, due to the optimization of the hubs in London and Madrid.

As part of the merger BA shareholders will receive one new share against each they have in BA, and Iberia shareholders will receive 1.0205 shares for each of theirs. The IAG shares will be traded first on the FTSE in London, and then later in Madrid.

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