Published: Thu, April 12, 2018
Business | By Kate Woods

British Airways parent IAG eyeing a bid for Norwegian Air

British Airways parent IAG eyeing a bid for Norwegian Air

Aviation giant IAG, which owns British Airways, has confirmed that it is keen to enter talks with Norwegian about a potential takeover deal.

IAG said in a statement it considered Norwegian to be an "attractive investment".

Shares in Norwegian Air rocketed 18% in Oslo following news of IAG's interest.

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IAG said in a stock market announcement that it has acquired a 4.61% stake in the airline, which is "intended to establish a position from which to initiate discussions with Norwegian", including the possibility of a full offer for the firm.

But IAG stresses that no talks have taken place with Norwegian and that it has not made any decision on making an offer.

Seasoned deal-maker Walsh was much quicker than rival full-service airlines Air France-KLM (AIRF.PA) and Lufthansa (LHAG.DE) to embrace budget flying, buying short-haul carrier Vueling in 2015 and setting up IAG's own long-haul low-priced carrier Level past year.

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The owner of British Airways is eyeing a takeover of its budget rival Norwegian amid a mounting price war on key long-haul routes.

Bjorn Kjos, the CEO and founder of Norwegian, said earlier this month that "everybody in Europe" have wanted to acquire his airline.

British Airways' parent company said Thursday it is considering making an offer for the low-priced carrier. "Norwegian believes that interest from one of the largest worldwide groups demonstrates the sustainability and potential of our business model and global growth", it said in a statement.

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IAG's interest in Norwegian would see a wave of consolidation in European air travel which started a year ago extend its reach to long-haul travel. The company has a market capitalisation of about 12.6 billion pounds ($17.89 billion).

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