DealZone Daily

November 13, 2009

British Airways and Iberia finally agree to a merger that will create the world’s no. 3 airline by revenue. The all-stock deal, giving BA shareholders about 55 percent of the combined company, is just the (airline) ticket for the columnists: it’s cleared for takeoff after a long time on the runway and so on.

Alistair Osborne in the Telegraph says on “pure current valuation grounds, it’s not an amazing deal for BA. But strategically it presses most buttons – and there’s plenty of extra value to come from the mooted €400m of synergies, which are bound to prove an undershoot.”

Nils Pratley in the Guardian says the deal is not a glorious victory for BA, which still faces big challenges in both short- and long-haul business. While the deal is “significant, BA’s more important proposed deal is probably the attempt to secure anti-trust immunity for an alliance with American Airlines.”

David Wighton in the Times cautions that “stapling together two loss-making airlines does not guarantee that both will improve” and wonders if it will lead to improved service at Iberia or worse service at BA.

Meanwhile, FT Alphaville breaks down the key terms of the memorandum of understanding.

For more coverage on this, and the rest of the latest deals news from Reuters, click here.

In the newspapers:

* Lloyds Banking Group (LLOY.L) has more than 700 million pounds ($1.2 billion) of debts and investments tied up in Kenmore Property, the London Times says.

* Standard Chartered (STAN.L) (2888.HK) expects to list on the Indian bourse by April next year depending on market conditions, the Economic Times reported, citing the bank’s group chief executive. Reuters story here.

* Germany’s Allianz SE (ALVG.DE) and MAN SE (MANG.DE) will pay off the remaining debt owed by their jointly owned printing press subsidiary, manroland, according to the Frankfurter Allgemeine Zeitung. Reuters story here.

* The Interac Association, which processes most debit-card transactions in Canada, has hired JPMorgan to help it restructure into a for-profit company, should regulators allow, the Globe and Mail newspaper says.

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