Icelandair Group has entered into a share purchase agreement to take over low-fare compatriot Wow Air in its entirety, the Reykjavik-based flag carrier announced Monday. Still subject to approval by Icelandair Group’s shareholders, the Icelandic competition authorities, and a due diligence review, the deal would grant shareholders of financially troubled Wow Air the equivalent of 5.4 percent of Icelandair’s shares. Under the terms of the deal, the companies will continue to operate under separate brands. The companies’ market share of the transatlantic market totals around 3.8 percent.
“Wow Air has in recent years built a strong brand and enjoyed great success in the company’s markets to and from Iceland and across the Atlantic,” said Icelandair Group interim president and CEO Bogi Nils Bogason. “There are many opportunities for synergies with the two companies, but they will continue to operate under their own brands and operating approvals. The tourism industry is one of the cornerstones of the Icelandic economy and it is important that flights to and from Iceland will remain frequent.”
Icelandair Group plans to schedule a meeting “in the coming days” to allow shareholders to cast their vote on the acquisition. The company said it would give at least three weeks' notice before holding the shareholders meeting.