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IAG Completes Takeover of Lufthansa unit bmi

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Source: AFP

International Airlines Group has completed its takeover of Lufthansa unit bmi, and agreed to purchase its low-cost and regional operations at a “significant” discount, IAG said on Friday.

“IAG has completed the purchase of bmi from Lufthansa. It is planned that bmi mainline will be integrated into British Airways and consultation has begun already with bmi mainline staff and their trade unions,” a statement said.

The London-headquartered group, holding company of British Airways and Iberia, added that it would continue to operate the no-frills division bmibaby and bmi regional in the short term, but look also to offload them because they were not part of IAG’s long-term plans.

“bmibaby and bmi regional have not been sold prior to completion” of the deal to buy bmi mainline, said IAG.

“Under the terms of the purchase agreement, IAG will also acquire these businesses and receive a significant price reduction. IAG will pursue options to exit these businesses and more details will be provided in due course.”

“The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction.”

The discount would be applied to the overall price. IAG had agreed late last year to purchase Lufthansa’s loss-making unit, formerly known as British Midland, for GBP172.5 million (about US$277.8 million).