Banc Sabadell: The European Commission (EC) would see significant competition problems in the purchase of Air Europa by IAG (IAG), much more than in 2019, when the operation was initially considered, due to the greater weight of the Spanish market since then.
It should be recalled that the EC communicated at the end of January that it was initiating a detailed investigation (phase II) into the proposed acquisition of Air Europa by Iberia as they want “the operation to not adversely affect prices or the quality of services”, according to Vestager.
From 25 January this year, the EC has 90 working days (until 7 June) to take a final decision, provided it does not request additional information from the parties involved, in which case the clock would be stopped (at the moment it cannot be determined whether this will happen or not and how long the stoppage will last). In addition, at this stage Iberia will present its remedies package (already rumoured) to try to pave the way and get the green light for the deal.
Assessment: Negative news, albeit with limited impact. It was known that the EC’s analysis of the deal would be in-depth (the final decision is expected in 4Q24). The purchase of Air Europa seems to be an interesting operation for IAG.
