Norwegian rejects two IAG takeover bids

Norwegian has confirmed it has rejected two separate takeover bids from British Airways owner International Airlines Group (IAG).

The board of Norwegian said it has “unanimously rejected” two bids from IAG in relation to a 100 percent takeover of the group.

In a statement, the Scandinavian carrier said the offers undervalued the business and its prospects.

IAG bought a 4.61 percent stake in Norwegian last month with a view to opening talks about a deal.

At the time it said: “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.”

Norwegian responded by saying it had “no prior knowledge of this acquisition before it was reported by the media”.

However, since the potential offer emerged, Norwegian has established a steering committee “to review the situation” and “handle relevant inquiries” to safeguard the interests of shareholders.

According to figures from OAG Schedules, Norwegian’s (D8/DY) capacity has risen from 25 million seats in 2012 to reach 40.2 million in 2017. Its year-on-year growth from 2016 to 2017 was 12.2 percent, putting it just outside the top 20 fastest-growing carriers in the world.  

News of the two takeover offers for Norwegian came as IAG reported its financial results for the first quarter of 2018. Total revenue increased 2.1 percent to €5.02bn in the three months to 31 March 2018. First quarter operating profit was €280m, up from a restated €160m in Q1 2017. 

Willie Walsh, chief executive of IAG, said: "Our positive passenger unit revenue trend continued with an increase of 3.5 per cent at constant currency. This trend benefitted partially from the timing of Easter. Non-fuel unit costs before exceptional items were down 0.9 per cent at constant currency."

In the first three months of 2018, IAG capacity, measured in available seat kilometres (ASKs) was higher by 4.1 per cent with increases across all regions except Asia Pacific. The group said Vueling continued its aim to reduce the seasonality of its network through growth in the first quarter of the year with increases in both its domestic and European markets.

Iberia also increased capacity primarily through additional frequencies in its domestic market, to European cities and on its North American routes. Aer Lingus and LEVEL growth reflects the full year impact of new routes launched in 2017. 

British Airways introduced Las Vegas from London Gatwick and Seychelles from London Heathrow. Passenger load factor rose 1.5 points to 80.5 per cent.

Watch: British Airways' chairman and chief executive Alex Cruz at Routes Europe 2018

Read more:
IAG mulls Norwegian takeover amid fierce transatlantic competition
Analysis: the transatlantic battle

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