IAG to Pony Up $85 Million Breakup Fee as Air Europa Deal Goes South

IAG said on Thursday it would pay 75 million euros ($84.8 million) to privately held Spanish company Globalia, after the British Airways-owner and Air Europa agreed to abandon their deal and work on alternative structures.

IAG had announced plans to buy Air Europa from Globalia for 1 billion euros in 2019, but the price was cut in half this year after the airline industry was sent into a tailspin by the COVID-19 pandemic.

The British airline group this week said it was set to cancel its takeover of Air Europa after European regulators indicated they would not allow it to go through without further concessions.

IAG said it would pay 35 million euros, on top of the 40 million euros break-up fee, after agreeing that the amount would be used to reduce any future purchase price if a new deal is reached and to avoid litigation.

($1 = 0.8842 euros) (Reporting by Yadarisa Shabong in Bengaluru; Editing by Amy Caren Daniel)

This article was from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.