IAG International Airlines Group and its Spanish flag-carrier subsidiary Iberia (IB, Madrid Barajas) will hold board meetings on December 16-17 to decide whether to proceed with the acquisition of recently-rescued Air Europa (UX, Palma de Mallorca), El Confidencial reported on December 15.

Gathering to deliberate on the consequences of the ongoing Brexit negotiations for the group, the board of directors will also decide whether to approve the acquisition of the airline if Spain’s sovereign wealth fund (Sociedad Estatal de Participaciones Industriales - SEPI) facilitates a definitive agreement on the takeover.

The British Airways parent agreed to buy Air Europa for EUR1 billion euros (USD1.2 billion) in November 2019 but now wants to reduce the price to reflect the current Covid-created travel crisis. IAG sees a deal as enhancing its operations to Latin America and the Caribbean. Last month, Madrid announced a EUR475 million (USD577 million) aid package for Air Europa.

The Brexit uncertainty could affect the decision to buy the carrier, even though Spanish Prime Minister Pedro Sanchez told a news conference last week that Iberia - the IAG unit that would take control of Air Europa - should not have any problems operating in the European Union’s airspace post-Brexit.

As previously reported, Iberia has reportedly proposed paying between EUR300 and EUR400 million (USD365-486 million) for Air Europa from current owner Globalia but with a package of IAG shares that cannot be sold for three to five years. IAG has itself just carried out a massive EUR2.74 billion (USD3.33 billion) capital increase, which has been a hard sacrifice for its shareholders, while Iberia has asked for up to EUR1 billion (USD1.2 billion) in state-guaranteed loans to survive until mid-2021.

The substantial reduction on the original price is also due to the fact that family-run Globalia is, according to El Confidencial, in technical bankruptcy, and the sum loaned by SEPI may not be enough to help it stay on its feet if demand remains low during the first quarter of 2021. However, if IAG rows back on the acquisition, it could open a window of opportunity for rival Air France-KLM, which has already tried on several occasions to buy the carrier, the newspaper suggested.