First Free Story (1 of 3)Join Skift Pro
Qatar Airways Ltd. raised its stake in British Airways owner IAG SA to 20 percent, taking advantage of a drop in the company’s stock price since the Brexit vote to tighten ties with its main European partner.
The state-owned carrier, which increased its holding from 15.7 percent as of July 28, doesn’t plan to add to the stake, the company said Monday in a statement.
“The recent market valuation of one of the world’s leading airline groups has provided what we believe is an attractive opportunity to increase our shareholding in IAG,” Qatar Airways Chief Executive Officer Akbar Al Baker said in the statement.
The announcement was the third time this summer that Qatar Airways, already London-based IAG’s biggest shareholder, has sought a stake in a foreign company. As part of its global expansion strategy, the Persian Gulf’s No. 2 airline also plans to buy as much as 10 percent of Latam Airlines Group SA, South America’s biggest carrier, and 49 percent of Italy’s second-largest airline, Meridiana Fly SpA.
IAG, which also owns Spanish airline Iberia and Irish carrier Aer Lingus, was trading down 1.9 percent at 398.5 pence as of 8:40 a.m. in London, reversing a gain earlier in the day. The stock has dropped 24 percent since the the U.K. referendum on June 23 to exit the European Union. The company cut its earnings target for 2016 last week, citing the vote approving Britain’s pullout from the bloc.
Qatar Airways has raised its stake in IAG since buying an initial 9.9 percent last year. It joined the British company’s Oneworld Alliance in 2013, backed by IAG CEO Willie Walsh at a time when European rivals were criticizing the expansion of Gulf airlines.
©2016 Bloomberg L.P.
This article was written by Deena Kamel Yousef from Bloomberg and was legally licensed through the NewsCred publisher network.