COLOGNE (dpa-AFX) - International Consolidated Airlines Group SA (IAG.L), or IAG, Thursday jointly reported agreeing to acquire British Midland Ltd., or bmi, from Deutsche Lufthansa AG (LHA.DE, DLAKY.PK) for a agreed cash consideration of 172.5 million pounds, with the actual net purchase price expected to be 'much lower'. The transaction is anticipated to close in first-quarter 2012 and may contribute to IAG's earnings by 2014.
The deal sees Lufthansa take on bmi's defined benefit pension scheme through a British holding company and also, optionally, divest of bmi's subsidiaries bmi regional and bmibaby prior to the transaction's completion. IAG noted that the purchase price may be significantly reduced if bmibaby is not sold off. IAG chief executive Willie Walsh noted that there was an 'urgent need' to restructure bmi, and said 'Unfortunately, this will mean some job losses.'
Walsh also commented 'IAG's purchase of bmi will protect more British jobs than if the airline had been closed and had its Heathrow slots sold off. There will be restructuring costs spread over three years but these will be significantly lower in total than bmi's current annual losses.' The agreement also imposes a termination fee of 10 million pounds on IAG if the deal does nto close by March 31, 2012.
Copyright RTT News/dpa-AFX
