Qatar Airways Company Q.C.S.C. or Qatar Airways has made a $600 million deal with the owner of British Airways, International Airlines Group, SA. (IAG) and increased its holding to 25.1% shares of the company. Qatar Airways officials said that the latest buyout move aimed at strengthening its position ahead of the restructuring in the IAG management as well as supporting IAG’s market strategies.
Qatar Airways’ Holdings in Global
State-owned Qatar Airways, one of the Middle East’s biggest carriers, has owned several stakes in various airlines across the globe and is planning to expand its holding beside the recent move of IAG.
The state-backed Qatar airline, which also owns Spanish carriers, Iberia Airline and Vueling Airline as well as Ireland’s Aer Lingus Airline, has been looking to invest in European airline operations over the years. Some investors of the Middle East-based carrier said earlier this month that Air Italy, which Qatar Airways currently owns 49% shares, was placed into liquidation due to “persistent and structural market problems.”
Apart from Europe, the airways company has minority holdings in international carriers of Asia-based airlines including Hong Kong-based Cathay Pacific Airways and China Southern Airlines. The officials of Qatar Airways revealed earlier this month that the airline carrier was interested in doubling its stake up to 20% in a Chilean airline holding company, LATAM Airlines Group and was in talks to buy a 49% stake in Africa’s RwandAir.
Qatar Airways first invested in the Anglo-Spanish group, IAG in 2015 and owned 9.99% shares of the latter company. With the latest buying of stake, Qatar has increased its stake from its previously held 21.4% of IAG to 25.1%. Such an endorsement of the Anglo-Spanish group would help Qatar’s position in the board members of IAG.
Qatar’s Holding in IAG
Qatar group has increased its holding in IAG after the regulators lifted restrictions on investments from outside the European Union last month. For the last six months, the European-based carrier has risen its share price by 52%.
Under the observation of the present CEO, William M. Walsh, IAG was created by a merger between the British and Spanish flag carriers in 2011. Luis Gallego, who has been overseeing Iberia Airways since 2014, will replace Walsh as he will be stepping down from the position of CEO of IAG next month.
A year ago, IAG, which is registered in Madrid and headquartered in London, capped its equity held outside the European Union (EU) at 47.5% as per the EU ownership rules. With Britain’s departure from the EU, the matter became a little complicated and the officials of IAG said in January 2020 that the cap was no longer required since non-EU ownership had fallen to 39.5%.
Citing the latest investment was mostly aimed for financial purposes, Qatar Airways Group’s CEO Akbar Al Baker said, “Our investment to date has been highly successful and the announced increase in our shareholding is evidence of our continued support of IAG and its strategy.” Following the news, IAG shares were up 0.8% at 637 pence, giving it a market value of 12.67 billion pounds ($16.4 billion) at 1110 GMT Wednesday.
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