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BA/IB Merger Delay  
User currently offlineBeyondBristol From United Kingdom, joined Jan 2009, 60 posts, RR: 0
Posted (5 years 3 months 3 weeks 2 days 8 hours ago) and read 3254 times:

IB's CEO has said there may be a delay in the merger of BA/IB due to poor financial performance of IB, and has hinted that IB might go into loss this year.

http://www.ft.com/cms/s/0/d8da0816-3f14-11de-ae4f-00144feabdc0.html

I would have thought that this would push the companies to press ahead with a merger? Surely this would also help resolve the dispute over the stake in the merged entity. Maybe someone with more financial knowledge can inform me why they maybe delaying it?

I was hoping 2009 would bring great hope for BA, with the AA and IB deals. Let's wait and see.


I'll admit it...I'm a BA & VS cheerleader.
11 replies: All unread, jump to last
 
User currently offlineAirbusA6 From United Kingdom, joined Apr 2005, 2013 posts, RR: 0
Reply 1, posted (5 years 3 months 3 weeks 2 days 7 hours ago) and read 3224 times:

So BA may get a bigger stake in the combined entity after all  Wink

I guess with the global economic carnage, complicated megamergers are too risky at the moment?



it's the bus to stansted (now renamed national express a4 to ruin my username)
User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3573 posts, RR: 3
Reply 2, posted (5 years 3 months 3 weeks 2 days 5 hours ago) and read 2978 times:

It appears that the CEO of IB has been caught out in his own game plan
When BA's share price nose dived he tried to up IB's potential share in the combined business, refuting the BA response that short term share movements shouldn't be taken into account. Now that BA's share price has started to recover, and IB's has dived, he needs to do a U turn and pronounce the need to look to the long term.


User currently offlineHotelmode From United Kingdom, joined Jan 2007, 460 posts, RR: 1
Reply 3, posted (5 years 3 months 3 weeks 2 days 5 hours ago) and read 2961 times:



Quoting Bongodog1964 (Reply 2):
It appears that the CEO of IB has been caught out in his own game plan
When BA's share price nose dived he tried to up IB's potential share in the combined business, refuting the BA response that short term share movements shouldn't be taken into account. Now that BA's share price has started to recover, and IB's has dived, he needs to do a U turn and pronounce the need to look to the long term.

Quite! Highly amusing.


User currently offlineVV701 From United Kingdom, joined Aug 2005, 7479 posts, RR: 17
Reply 4, posted (5 years 3 months 3 weeks 2 days 3 hours ago) and read 2812 times:



Quoting Bongodog1964 (Reply 2):
When BA's share price nose dived he tried to up IB's potential share in the combined business, refuting the BA response that short term share movements shouldn't be taken into account. Now that BA's share price has started to recover, and IB's has dived, he needs to do a U turn and pronounce the need to look to the long term.

As at close of business on 12 May BA was capitalised at £1.88 billion (£1.631 per share) and IB at £1.23 (Euro 1.45 a share).

So having started off at more than two thirds the combined capitalisation of the two airlines at the start of merger talks and fallen to less than half a few months back, BA is back up to over 60 per cent as of yesterday. And it is not just the two share prices but also the exchange rate that is contributing to this volatility.


User currently offlineAIR MALTA From Malta, joined Sep 2001, 2499 posts, RR: 1
Reply 5, posted (5 years 3 months 3 weeks 1 day 18 hours ago) and read 2647 times:



Quoting Hotelmode (Reply 3):
Quite! Highly amusing.

I don't know if we ever will see BA merging with IB. It seems that they are competing against each other more than cooperating. Each company wants to have the biggest share of the cake and ultimately this won't work and one of them will walk away.

What happened with QF showed that BA was looking at alternatives. I don't think BA is so happy to cooperate with one of the least "favourite" airlines in Europe.



Next flights : BRU-ZRH-CAI (LX)/ BRU-FCO-TLV (AZ)
User currently offlineBurkhard From Germany, joined Nov 2006, 4396 posts, RR: 2
Reply 6, posted (5 years 3 months 3 weeks 1 day 18 hours ago) and read 2631 times:



Quoting Bongodog1964 (Reply 2):
It appears that the CEO of IB has been caught out in his own game plan
When BA's share price nose dived he tried to up IB's potential share in the combined business, refuting the BA response that short term share movements shouldn't be taken into account. Now that BA's share price has started to recover, and IB's has dived, he needs to do a U turn and pronounce the need to look to the long term.

He is paid to say so, and to try to get the best for his share holders. I doubt the merger to take place before the Olympics.


User currently offlineAustralis From Australia, joined Feb 2009, 98 posts, RR: 0
Reply 7, posted (5 years 3 months 3 weeks 1 day 18 hours ago) and read 2625 times:

I would of thought it would been an opportune time at present to merger BA/IB together, considering that both airlines are trying to minimise costs and simplify fleets. Obviously, egos are getting in the way.

Both airlines are strong on what they focus on yet cant seem to gather if they dont merge, they will be left behind considering that Lufthansa and AirFrance/KLM are getting stronger everyday and wont wait to strike, when necessary, to make sure BA and IB suffer....


User currently offlineLufthansa From Christmas Island, joined May 1999, 3213 posts, RR: 10
Reply 8, posted (5 years 3 months 3 weeks 1 day 17 hours ago) and read 2576 times:

As much as this almost sounds like a Joke... but I'm not sure these two can work together. If it were AA, BA and IB all merging...then I could see it working with AA acting as a mediator for the other two...allowing some kind of common ground to be achieved.

It's quite obvious for all to see that BA have some kind of sense of British Superiority, and that IB is suffering from the sort of Pride and Saving face thing that is so important in so many latin cultures and won't be towing to any inflated british egos. Both have got strong points. We all know BA's onboard product offering is better, but IB's got latin America stitched up like no tomorrow and IB has access to a cost base that BA can't ever really achieve in a high cost place like London. But I dont think either could bring themselves to any kind of submission with the other...hence the AA comment.

Now if it were QF and Not AA as the third party, I'd say it would fail entirely because it would just morph into a little BA/QF club with IB being dictated to.... something that wouldn't happen with American because of Americans understanding of Latin markets and how to work with those cultures. But that cant really happen as we know it because international law stands in the way.... unless we got some kind of tricky stock swap thing happening?


User currently offlineVeeseeten From United Kingdom, joined Nov 2008, 169 posts, RR: 0
Reply 9, posted (5 years 3 months 3 weeks 1 day 15 hours ago) and read 2469 times:



Quoting Lufthansa (Reply 8):
inflated british egos

I'd hardly call it inflated, given that they quite simply are the larger of the two.

I'm willing to overlook the semantics of your post, because you make some fairly sensible points. But I'd be careful about pasting national stereotypes into your theorising - it just doesn't really lend any weight to your argument and comes across as a bit insulting, whether you meant it or not.

Anyway, I've honestly felt for some time now that this merger is simply all about merging for the sake of merging. Its just my personal view, but there will come a point where AF/KL and LH will become dysfunctionally large and begin to suffer the consequences. Not to say I don't think they both have great management teams - because they do - but I do think that so much growth, so quickly, will ultimately begin to harm the greater entity down the line.


User currently offlineBurkhard From Germany, joined Nov 2006, 4396 posts, RR: 2
Reply 10, posted (5 years 3 months 3 weeks 1 day 13 hours ago) and read 2343 times:



Quoting Veeseeten (Reply 9):
Anyway, I've honestly felt for some time now that this merger is simply all about merging for the sake of merging. Its just my personal view, but there will come a point where AF/KL and LH will become dysfunctionally large and begin to suffer the consequences. Not to say I don't think they both have great management teams - because they do - but I do think that so much growth, so quickly, will ultimately begin to harm the greater entity down the line.

This will be the day when LH has swallowed IB and AF has swallowed BA, which could happen after 2013 if they don't manage to get strong enough, which might mean a merger. For the next 4 years, AF has all hands full with AZ, and LH with BM.


User currently offlineVeeseeten From United Kingdom, joined Nov 2008, 169 posts, RR: 0
Reply 11, posted (5 years 3 months 3 weeks 1 day 12 hours ago) and read 2321 times:

If you think for a second that the BA scenario would sneak by the competition authorities, then you really must have your head in the clouds. I can't really speak in specifics for IB, but it still seems pretty unlikely that they would be 'taken over' by any of the larger groupings, I think that would run foul of competition authorities as well. BA being acquired by another European carrier is flat out ridiculous. The only two large enough would be AF/KL or LH, as you state, but given both carriers' substantial UK interests - in the form of Cityjet, VLM and BMI - it would just never fly, so to speak.

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