IAG Gives Norwegian Until Next Year To Decide On Takeover

We have known for a long time that IAG is reportedly interested in an IAG Norwegian takeover. The airline group currently has a minority share in the company, however, no longer wants this minority. Instead, two options are reportedly on the cards. While purchasing Norwegian is one, the second option is selling its share. Acquiring Norwegian could be a huge boon for IAG who’s airline British Airways competes heavily with low-cost fares on some transatlantic routes.

What Do We Know?

IAG’s third-quarter results gave us a little bit of an insight into the current state of affairs. At the presentation, Willie Walsh, the airline group’s CEO, initially told those present that there was nothing to report on the matter. He then went on to say “It’s not going to continue forever…if we haven’t concluded arrangements by, certainly, by August of next year, and probably before, we won’t have those shares.”

Given that IAG still has these shares and Willie Walsh hasn’t ruled it out for the next year, it seems as though a deal may very well still be on the cards. Mr Walsh had previously told us that the group was looking to sell its shares which were purchased to commence talks. “We’re not going to keep the shares, we’re not an investor. We bought that small stake to initiate a conversation and if that conversation is not going anywhere, as it’s not, we’re not going to hold on to those shares.”

This led Norwegian’s Cheif Executive, Bjorn Kjos, to comment: “We’ve never been working towards acquisition, we’re working towards being an independent, profitable company, and that hasn’t changed.”

IAG norwegian takeover
Norwegian has previously ruled out any interest in a takeover. Photo: Norwegian

$1Bn Fleet Investment

Norwegian is currently in advanced talks with an unnamed investor regarding investing in upgrading the airline’s fleet. This comes after the airline was reportedly looking to sell aircraft which hadn’t even been built yet back in September. What came as a surprise to us was Willie Walsh’s reaction to this news. However, Mr Walsh said the news had not shocked him.

“We had anticipated that they would do something in relation to the fleet. We know that a number of the lessors have been interested in the Norwegian fleet. So no surprise there. I see it as a positive for Norwegian, but it’s not a surprise to us. It was something that we had anticipated and expected”

IAG norwegian takeover
IAG CEO Willie Walsh has given Norwegian a year to decide on a takeover. Photo: Stuart Bailey

We will have to wait to see how the ongoing saga of a Norwegian develops. Simple Flying will, of course, keep you up to date with any developments. Do you think an IAG Norwegian takeover will eventually occur? Let us know in the comments below!

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Ben

all the IAG wants to do is bully Norwegian into a buyout so they can screw with them and become just another number in aviation