IAG Is Considering a Complete Takeover of Norwegian Air
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Update 8:00am ET: Norwegian has issued the following statement:
“Norwegian has just been made aware that the International Airline Group (IAG) has acquired of 4.6 percent of the shares in Norwegian Air Shuttle ASA. Norwegian had no prior knowledge of this acquisition before it was reported by the media mid-morning Thursday. Norwegian has not been in any discussions or dialogue with IAG about the matter. Norwegian believes that interest from one of the largest international aviation groups demonstrates the sustainability and potential of our business model and global growth.”
IAG, the parent company of British Airways, Iberia, Aer Lingus, among others, announced on Thursday that it’s acquired a 4.61% stake in low-cost carrier Norwegian Air. The move signals that IAG could be considering a full acquisition of Norwegian.
The preliminary minority stake puts IAG in position for a potential takeover — one that IAG is considering. “The minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian,” IAG said in a statement.
At this point, IAG has acquired just the 4.61% stake in Norwegian. The group says that no further discussions for a complete takeover have taken place to date. In addition, at this point, it has made no decision whether or not it will make an offer to Norwegian, and there is no certainty that it will.
Norwegian Air declined to comment.
Since the announcement, shares of Norwegian Air soared by a record 26% on Thursday. Bloomberg reports that a potential acquisition of Norwegian has a market value of about $3 billion, including debt.
IAG has slowly been adding to the number of low-cost airlines in its group. It already owns low-cost Spanish carrier Vueling. And in March 2017, it launched a low-cost long-haul carrier — also based in Spain — called LEVEL.
Norwegian has rapidly been expanding its low-cost operations around the world, disrupting operations and putting pressure on legacy carriers, such as IAG’s own British Airways and Aer Lingus. The rate at which Norwegian has been growing has caused some financial trouble for it, too. The carrier reported a net loss of €30.8 million in 2017, compared to a €116 million profit in 2016. The loss was driven by significant costs associated with hiring in its expansion, as well as rising fuel costs.
Welcome to The Points Guy!
Earn 90,000 bonus miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new card in the first three months of card membership. Offer ends 11/10/2021.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles and 10,000 Medallion® Qualification Miles (MQMs) after you spend $3,000 in purchases on your new Card in your first 3 months. Offer expires 11/10/2021.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees