British Airways owner IAG mulls Norwegian takeover bid
IAG hoping to poach low-cost rival which has revolutionised transatlantic travel
Aviation giant IAG, which owns British Airways, has confirmed that it is keen to enter talks with Norwegian about a potential takeover deal.
Shares in Norwegian rose sharply today after IAG purchased a 4.6% stake in the budget airline.
IAG, which also owns Iberia, Aer Lingus and Vueling, confirmed suspicions that the purchase signalled a broader interest in acquiring the company. “The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian,” it said. No talks have yet taken place.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Norwegian is currently the third-largest budget carrier in Europe and the eighth-largest in the world. Since launching its first long-haul services in 2013, the airline has become a major player in the transatlantic aviation business, offering low-cost fares to the US.
The company’s recipe for success, “bringing a budget airline model to the long-haul sector”, is “ruffling feathers in the aviation market”, says BBC business editor Simon Jack.
In June 2017, IAG launched rival low-cost transatlantic carrier Level, applying the same bare-bones business model. “Passengers can travel with just one piece of carry-on luggage, do not qualify for refunds, and must pay extra for an on-board meal or to pre-select a seat,” The Daily Telegraph reported at the time.
A spokesman for Norwegian did not comment on the airline’s stance towards a takeover bid, but said that IAG’s interest “confirms the sustainability and potential of our business model and global growth”.
However, City AM notes that Norwegian “has been battling rising fuel prices with question marks raised by analysts over whether it was growing too fast too quickly”.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Labour shortages: the ‘most urgent problem’ facing the UK economy right now
Speed Read Britain is currently in the grip of an ‘employment crisis’
By The Week Staff Published
-
Will the energy war hurt Europe more than Russia?
Speed Read European Commission proposes a total ban on Russian oil
By The Week Staff Published
-
Will Elon Musk manage to take over Twitter?
Speed Read The world’s richest man has launched a hostile takeover bid worth $43bn
By The Week Staff Last updated
-
Shoppers urged not to buy into dodgy Black Friday deals
Speed Read Consumer watchdog says better prices can be had on most of the so-called bargain offers
By The Week Staff Published
-
Ryanair: readying for departure from London
Speed Read Plans to delist Ryanair from the London Stock Exchange could spell ‘another blow’ to the ‘dwindling’ London market
By The Week Staff Published
-
Out of fashion: Asos ‘curse’ has struck again
Speed Read Share price tumbles following the departure of CEO Nick Beighton
By The Week Staff Published
-
Universal Music’s blockbuster listing: don’t stop me now…
Speed Read Investors are betting heavily that the ‘boom in music streaming’, which has transformed Universal’s fortunes, ‘still has a long way to go’
By The Week Staff Published
-
EasyJet/Wizz: battle for air supremacy
Speed Read ‘Wizz’s cheeky takeover bid will have come as a blow to the corporate ego’
By The Week Staff Published