MADRID (Reuters) -Turkish Airlines has signed a deal to buy around one-quarter of Spanish carrier Air Europa, the airlines said on Thursday. Turkish Airlines is to invest 300 million euros ($355
Turkish Airlines inks deal to buy minority stake in Spain's Air Europa
MADRID (Reuters) -Turkish Airlines has signed a deal to buy around one-quarter of Spanish carrier Air Europa, the airlines said on Thursday.
Turkish Airlines is to invest 300 million euros ($355 million) in convertible debt, which will be exchanged for a stake expected to be in the range of 25% to 27%, under a deal agreed in August.
Spain's Hidalgo family, through Globalia, will continue to be the majority shareholder of Air Europa, while British Airways owner IAG will retain its current 20% stake through the purchase of shares from Globalia.
Turkish Airlines has said it has no plans to increase the stake.
The transaction, which will close once regulatory requirements have been met in about 6 to 12 months, values Air Europa at approximately 1.2 billion euros ($1.4 billion).
The deal is a rare case of a non-European carrier buying a stake in an airline on the continent and comes as airlines are looking to consolidate the continent's fragmented market by snapping up smaller struggling operators.
Turkish Airlines beat European rivals Lufthansa and Air France-KLM to secure the agreement to share control of the carrier with the Hidalgo family.
After announcing the deal, Air Europa said it had repaid a loan of almost 500 million euros from Spain's state-owned industrial holding company SEPI one year ahead of schedule.
Reuters first reported in June that Turkish Airlines was interested in buying a minority stake.
($1 = 0.8575 euros)
(Reporting by Emma Pinedo; Editing by Charlie Devereux and Conor Humphries)
