Icelandair back on track to acquire Wow Air
The question of investment into Wow Air has come back to the initial name on a list - Icelandair. Both Icelandic companies confirmed the news, noting that discussions were revived as a third potential investor - Indigo Partners - pulled out from negotiations.
On March 22, 2019, Wow Air confirmed that Indigo Partners cancelled their proposed investment into the Icelandic low cost carrier, thus all negotiations between the two have been ceased.
Instead, Wow Air is now in discussions with Icelandair Group and hopes are to conclude them by March 25, 2019. The topic of these blitz negotiations are the “group’s involvement in [Wow Air’s] operations,” as Icelandair puts in. Nevertheless, the airline also points out that talks “will be based on the doctrine of competition law regarding the failing firm defence” and will “take place in cooperation with the Icelandic authorities”.
On November 5, 2018, the Icelandair Group – a parent company of the country’s flag carrier – issued a brief statement confirming a purchase agreement of all WOW Air shares. But just three weeks later, the group has withdrawn from WOW air acquisition as unexpectedly as it has announced it.
Left to fend for itself, by mid-December 2018, WOW air had entered restructuring, which includes cutting its fleet by (almost) half and laying off hundreds of employees. However, the airline noted it was a temporary measure while discussions with potential investor Indigo Partners progress.
Indigo Partners investment into Wow air was estimated to involve a (potential) $75 million financial boost. But only if the two parties actually managed to complete the acquisition before the deadline set at the end of February 2019
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