April 10, 2013 / 11:51 AM / 6 years ago

IAG chief says won't merge Spanish airline Vueling with Iberia

Chief Executive Willie Walsh of IAG attends a news conference in London November 17, 2011. REUTERS/Suzanne Plunkett

ABU DHABI (Reuters) - International Airline Group (ICAG.L) will not merge Spanish low-cost airline Vueling VULG.MC with its Iberia unit if its takeover bid is successful, IAG’s chief executive Willie Walsh said on Wednesday.

The board of Vueling on Tuesday unanimously recommended shareholders accept an improved offer of 9.25 euros per share from IAG. [ID:nL5N0CW3V6]

Walsh said the profitable Vueling business will operate separately from loss-making Iberia after the takeover.

“We have no intention of merging Vueling and Iberia,” he told reporters at the sidelines of a tourism event in Abu Dhabi on Wednesday.

“Vueling will operate as a stand-alone entity in IAG group.”

IAG, which already owns 45.85 percent of Vueling as well as British Airways and Iberia, last month raised its bid by almost a third after the Vueling board rejected its previous offer of 7 euros per share.

Walsh said that he was happy with the price it has offered for Vueling.

“We think it’s the right price. It’s a clearly the price I’m prepared to pay,” said Walsh.

IAG, which is trying to lay off more than 3,000 workers and cut salaries at Iberia to return the unit to profitability, is expected to use Vueling to boost its short-haul business and better compete with other low-cost operators.

Reporting by Praveen Menon; Editing by Greg Mahlich

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