The Spanish stock market authority announced last Tuesday that IAG airline had enough bid acceptances to gain control of the airline Vueling.
Currently, IAG controls 45.85% of Vueling as well as shareholdings in British Airways and Iberia, the Spanish airline. It forwared a bid last month of Eur7 per shares but was rejected. The new bid made is one third higher than the previous bid and with the acquisition, IAG now owns 90.51% of the airline.
The total purchase was at Eur123.5 million or US$160 million after pushing the offer to Eur9.25 per share.
According to CEO Willie Walsh, IAG had sought the control of Vueling after its Iberian airline suffered losses amounting to Eur23 million in 2012. While Vueling would remain as a standalone unit with its own CEO Alex Cruz, Vueling would report to Walsh instead of Iberia. One of the next steps for Iberia is to cut nearly 3,000 jobs in order to stave off further losses.
According to Walsh, "We plan to retain Vueling's current business model and management structure and its strong base in Barcelona. It will benefit from the group's financial strength."
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