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IAG: new merger options with TAP Portugal after failure with Air Europa

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Posted By: The Corner 17th September 2024

Banco Sabadell: After failing to go ahead with the purchase of Air Europa (AE) in the short term, there is TAP Portugal, which IAG has already winked at. We believe it makes strategic sense mainly because of its positioning in LatAm (market share close to 7%; with less overlap than AE) and because it deepens the concentration of the sector and also generates synergies (between €250-600 million according to our estimates). The success of the operation will depend on the financial conditions for the privatisation of 100% of TAP, which we believe could imply a price range between €1,000/2,500 million. In IAG the business is going well, we maintain our estimates and do the rollover’25, raising the P.O. to €3.00/share (+15% vs. previous). We maintain OVERWEIGHT (potential +27%).

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.