Icelandair Group has entered into a share purchase agreement to purchase all shares in budget carrier and Iceland rival Wow air – subject to approval by its shareholders and Icelandic competition authorities.
No details of how much the deal was worth has been revealed. 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 per cent of Icelandair Group‘s shares after the transaction. Thereof, 178.066.520 shares or 3.5 per cent of the shares as consideration for the sold shares.
The consideration can increase to 4.8 per cent or decrease to 0.0 per cent in accordance with certain conditions set forth in the share purchase agreement. 94.275.347 shares or 1.8 per cent of the shares will be paid due to conversion of a subordinated loan into equity.
The companies will continue to operate under separate brands. Their combined market share on the transatlantic market is around 3.8 per cent.
Icelandair Group said the acquisition creates opportunity for both companies to become even better prepared to provide international carriers with strong competition in the international airline market.
Icelandair Group interim president and chief executive officer (CEO), Bogi Nils Bogason said: “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.“
Wow air CEO and founder, Skúli Mogensen (pictured left) added: “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.