After an intense night of negotiations at the home of Javier Hidalgo, CEO of Air Europa, a historic agreement was reached at 6:30 a.m.: Iberia would acquire Air Europa for €1 billion. The meeting, held in Madrid’s exclusive Puerta de Hierro neighborhood, included Iberia’s chairman Luis Gallego, CFO José Antonio Barrionuevo, and legal representatives from both sides (Linklaters and Garrigues), who formalized the deal. With the agreement signed, the group had enough time to inform the government and markets before the stock exchange opened.
IAG’s Strategic Interest
IAG, Iberia’s parent company, rushed to close the deal so it could be presented during its Capital Markets Day in London, aware that other airlines—such as Air France—were also bidding for Air Europa. The objective: to strengthen its position in the Latin American market, a key strategic area for the group.
The operation was led by Javier Hidalgo, son of Air Europa’s founder Juan José Hidalgo. Although the elder Hidalgo did not participate directly in the negotiations, he closely followed every development. Talks began in the spring after an initial approach between Gallego and the younger Hidalgo, when Iberia learned of Air France’s interest.
Legal Teams and Synergies
Both parties assembled advisory teams: KPMG, Morgan Stanley, and Garrigues for Iberia; EY and Linklaters for Air Europa. Later, Clifford Chance joined as a competition law specialist. As the meetings progressed, synergies and potential regulatory hurdles were identified.
Although Air Europa will operate autonomously within IAG, the deal will be reviewed by the European Commission, particularly due to potential route overlaps within Spain. However, IAG insists it complies with the law and hopes to avoid having to relinquish routes or slots.
A New Landscape for the Industry
In a climate of uncertainty—marked by volatile oil prices, flight overcapacity, economic slowdown, and Boeing’s troubles—this merger represents a strategic opportunity to secure Air Europa’s future viability. Analysts agree the agreed price is reasonable for both parties.
From Old Rivals to New Allies
The relationship between Iberia and Air Europa has been marked by tensions. Juan José Hidalgo attempted to acquire Iberia in 2001 and again in 2007, but his efforts failed. In 2011, the merger of Iberia and British Airways shifted the company’s trajectory, ushering in a recovery period. Now, after years of direct competition, both airlines are coming together under the same group.
A Profitable Farewell for the Hidalgo Family
For Juan José Hidalgo, this sale is emotionally significant. Air Europa has long been his flagship project. Nevertheless, he acknowledges that the deal is key to the future of the Globalia group. Of the €1 billion, €515.8 million goes to the patriarch, who owns 51.58% of the capital. The rest is held by his children and other relatives: Javier (17%), Cristina (7%), María José (5.1%), his wife (5%), and his brother Juan Antonio (9.1%).
