International Airlines Group has officially confirmed that it has abandoned its attempt to bid for Norwegian.
IAG issued a short update to the stock exchange shortly before 12:30 GMT on Thursday 24 January 2019 to confirm that it will not bid to buy the airline. It will also sell its shareholding of just under 4%.
Last April, IAG acquired a stake in Norwegian with a view to making a bid for the airline.
IAG always maintained that it would not make a hostile bid for the airline. It had made conditional offers in private which had not been accepted by Norwegian.
Due to the size of their shareholdings no bid could be successful without the support of its co-founders, Bjørn Kjos and Bjørn H. Kise who own a joint 27% stake in the airline.
IAG has praised Norwegian for proving there is a market for low lost long-haul travel but has said that Norwegian’s growth rate is unsustainable. Norwegian is currently moderating its growth as well as undertaking cost-saving measures and reshaping its route network.
It has to be said that given the number of overlapping city pairs between IAG airlines and Norwegian, and increased regulatory scrutiny of joint-ventures, it was unlikely a bid could succeed without significant slot divestures.
This means that IAG is likely to pursue growth in low cost long-haul through its own brand LEVEL, and a new aircraft order for LEVEL is expected shortly.
Norwegian issued the following statement in response:
“Norwegian’s plans and strategy remain unchanged. The company’s goal is to continue building a sustainable business to the benefit of its customers, employees and shareholders.”
Chairman of the Norwegian Board, Bjørn Kise.