Omicron grounds IAG deal to buy Air Europa
British Airways owner IAG lost some altitude as the Omicron variant scuppered plans to buy rival airline Air Europa.
the FtsE 100 firm, which also owns irish carrier Aer Lingus, fell 5.1pc, or 6.76p, to 125.8p after ending discussions to buy spain’s third-largest airline.
it comes over two years after it first unveiled plans to buy Air Europa for £850m. the price was halved to £425m in January after the onset of the pandemic battered airlines across the world.
the deal was also being probed by regulators in the UK and Europe amid concerns it could reduce competition in the British and spanish airline markets.
in November, the Competition and Markets Authority said it was considering a probe.
A successful takeover would have increased iAG’s grip on the spanish aviation market given that the company already owns the country’s flag carrier iberia and budget airline Vueling.
hargreaves Lansdown analyst Laura hoy said: ‘Bringing Air Europa and the significant debt that came with it under [iAG’s] umbrella would have put further strain on the group’s balance sheet. With concerns about new Covid variants looming over the industry at present, news that the deal is off the table isn’t all bad.
‘right now caution, not bravery, seems the game plan.’
the FTSE 100 was down 0.66pc, or 47.89 points, at 7170.75 while the FTSE 250 declined 0.52pc, or 116.81 points, to 22433.88.
higher than expected inflation hit markets amid worries the cost of living could be squeezed further. the jump in prices by 5.1pc in November, the biggest increase in a decade, will also pile pressure on the Bank of England to raise interest rates today.
irish conglomerate DCC shot up 9pc, or 494p, to 6000p after snapping up Us firm Almo Corp in its largest acquisition to date.
Almo supplies electronics and appliances to businesses and consumers. DCC will pay £462m for the group, which is expected to double the size of its North American technology business.
Midwich Group, a provider of broadcast and audio equipment, rose 9.8pc, or 57p, to 637p after ‘stronger than expected’ trading despite product shortages.
it forecast a profit for 2021 of at least £30m, ‘materially ahead’ of its previous expectations.
Pharma giant GlaxoSmithKline saw its Covid-19 vaccine, which is being developed with French peer sanofi, delayed into next year.
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he had admitted 14 counts of bribery and admitted making corrupt payments between 2011 and 2018 to influence the awarding of contracts to the group. he was handed a two-year suspended sentence in October. Petrofac dropped 3.2pc, or 3.6p, to 108.6p.