Funding agreement sets BA, Iberia merger

The much anticipated merger between Iberia Airlines and British Airways (BA) is back on track after Iberia agreed to a plan which will see the newly merged entity essentially clear BA’s £3.7bn pension deficit.

In an agreement with its unions, BA has promised to contribute at least £330m annually until 2026, a move which Iberia have approved, the Independent reported.

Given the recent staffing and financial troubles of the much beleaguered BA, Iberia had the right to walk away from the deal, which is reportedly worth £5 billion, but after consideration of BA’s proposals has instead made clear the route to merge.

Iberia informed Spain’s Securities Market Commission earlier this week that its Board of Directors had decided “not to exercise its right to cancel the Merger Contract with British Airways in relation to the agreement reached between the latter and the trustees of its pension funds.”

"This decision represents another step forward in the merger process," Iberia said in a statement

The merger, already approved by the European competition watchdog now just waits for a formal shareholder sign off which is expected in November according to Iberia.

IAG will be headed by BA chief executive Willie Walsh, with Iberia chief executive set to be chairman.
Source = e-Travel Blackboard: G.A
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