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After months of speculation that International Airlines Group (IAG) would make further attempts to buy low-cost carrier Norwegian, the company has announced it has dropped its ambitions of a take-over and will sell its 4 per cent share in the airline.
IAG initially bought a 4.61 per cent stake in Norwegian in April 2018, hoping the transaction would open a route for future total buy-out talks. This stake was reduced to 3.93 per cent as a result of share offerings issued by Norwegian.
However, both parties confirmed in May that Norwegian had rejected two proposals from IAG, with the low-cost carrier saying the offers ‘undervalued’ the airline.
In June, IAG’s CEO Willie Walsh told an audience at the GTMC Overseas Conference that he was still interested in acquiring Norwegian but feared time was running out because of the carrier’s financial situation.
Norwegian reported a net loss of £24.7 million in 2017 after a £100 million profit in 2016, but has since introduced a number of cost-cutting measures to improve its performance, such as selling five of its A320neo aircraft in November.
In the second quarter of 2018, the airline recorded a net profit of just over £28 million, while the third quarter resulted in a £121 million profit.
It is not clear why IAG has dropped its ambitions of buying Norwegian, with a statement simply saying: “IAG confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA and that, in due course, it will be selling its 3.93 per cent shareholding in Norwegian.”