Icelandair buy WOW air
Icelandair Group has entered into a share purchase agreement to purchase all shares in the airline WOW air. This was just announced by Icelandair.
WOW air have been subjected to financial struggles of late.
The acquisition is subject to, approval by Icelandair Group‘s shareholders, the approval of the Icelandic competition authorities and a due diligence. As consideration for the shares, the shareholders of WOW air will, subject to conditions, receive a total of 272.341.867 shares or the equivalent of 5.4% of Icelandair Group‘s shares after the transaction. Thereof, 178.066.520 shares or 3.5% of the shares as consideration for the sold shares. The consideration can increase to 4.8% or decrease to 0.0% in accordance with certain conditions set forth in the share purchase agreement. 94.275.347 shares or 1.8% of the shares will be paid due to conversion of a subordinated loan into equity. All of sellers’ shares in Icelandair Group will be subject to restrictive covenants for 6 months and half of the shares will be subject to restrictive covenants to further six months.
The companies will continue to operate under separate brands. Their combined market share on the transatlantic market is around 3.8%. The acquisition creates opportunity for both companies to become even better prepared to provide international carriers with strong competition in the international airline market.
Bogi Nils Bogason, Interim President & CEO, Icelandair Group says, "WOW air has in recent years built a strong brand and enjoyed great success in the company‘s markets to and from Iceland and across the Atlantic.. There are many opportunities for synergies with the two companies but they will continue to operate under their own brands and operating approvals. The tourism industry is one of the cornerstones of the Icelandic economy and it is important that flights to and from Iceland will remain frequent.“
Skúli Mogensen, CEO and founder of WOW air: "I am very proud of the success and development that we at WOW Air have enjoyed in the past few years and I am thankful for the response we have received since our very first flight. We have created a strong team that has reached remarkable success and has been a pioneer in low cost flights across the North-Atlantic. A new chapter now starts where WOW air gets an opportunity to grow and prosper with a strong backer like Icelandair Group that will strengthen the foundations of the company and strengthen its international competitiveness even further.“
In the upcoming days, Icelandair Group‘s will convene a shareholders‘ meeting where Icelandair Group‘s shareholders will cast their vote on the acquisition. A shareholders’ meeting shall be convened with at least three weeks‘ notice.