Qantas and BA call off merger talks

JohnDotCom · 18th December 2008, 07:37

Qantas and BA call off merger talks

24 mins ago

Australian carrier Qantas Airways and British Airways (BA) have called off talks for a $6.4 billion (4.1 billion pound) merger, a deal that analysts said could have transformed the international airline industry.

Qantas announced the demise of the talks in a three-paragraph statement to the Australian stock market on Thursday, saying the two parties were unable to agree on key terms for a deal.
"Despite the potential longer-term benefits for Qantas and BA, the airlines have not been able to come to an agreement over the key terms of the merger, at this time," Qantas said.
Qantas Chief Executive Alan Joyce had warned last week that the merger faced major hurdles and would only go ahead if Qantas could secure major revenue and cost benefits. He also lamented the fact the talks had been leaked and forced out into the open.
A marriage of Qantas and BA faced several big challenges, not least the ownership split of the combined business, which was proposed to be formed by way of a dual-listed merger.
BA said in a separate statement on Thursday it would not agree to Qantas owning more than 50 percent of the combined entity, though Qantas is currently the larger firm by market value.
Under Australian law, Qantas must remain majority-owned by Australian investors and its head office, stock-market listing and major facilities must remain in its home country.
Other complications include BA's $2.2 billion in pension-fund liabilities and also BA's separate merger talks with Spain's Iberia. Qantas had ruled out a three-way merger.
"It was always going to be a difficult marriage and clearly there are a lot of pressures from outside the relationship that are being applied -- not least from Iberia and also within Qantas's institutional base," said Ian Thomas, analyst at aviation consulting firm CAPA Consulting.
There were questions being asked about how much value it was going to bring to the organisation and whether they would be better off pursuing an Asian partner as opposed to a European one," added Thomas.
Qantas, with a market value of about $3.3 billion, and BA, worth about $3.1 billion, are already code-sharing partners.
(Reporting by Sonali Paul and Mark Bendeich; Editing by Michael Perry)

18th December 2008, 07:37	#1
JohnDotCom * Rover 75 FaceLift Tourer CDTi 170BHP Auto ConnSE 2005 Model Starlight Silver Join Date: Nov 2006 Location: Abergele Posts: 28,735 Thanks: 0 Thanked 6 Times in 5 Posts	Qantas and BA call off merger talks Qantas and BA call off merger talks 24 mins ago Australian carrier Qantas Airways and British Airways (BA) have called off talks for a $6.4 billion (4.1 billion pound) merger, a deal that analysts said could have transformed the international airline industry. Qantas announced the demise of the talks in a three-paragraph statement to the Australian stock market on Thursday, saying the two parties were unable to agree on key terms for a deal. "Despite the potential longer-term benefits for Qantas and BA, the airlines have not been able to come to an agreement over the key terms of the merger, at this time," Qantas said. Qantas Chief Executive Alan Joyce had warned last week that the merger faced major hurdles and would only go ahead if Qantas could secure major revenue and cost benefits. He also lamented the fact the talks had been leaked and forced out into the open. A marriage of Qantas and BA faced several big challenges, not least the ownership split of the combined business, which was proposed to be formed by way of a dual-listed merger. BA said in a separate statement on Thursday it would not agree to Qantas owning more than 50 percent of the combined entity, though Qantas is currently the larger firm by market value. Under Australian law, Qantas must remain majority-owned by Australian investors and its head office, stock-market listing and major facilities must remain in its home country. Other complications include BA's $2.2 billion in pension-fund liabilities and also BA's separate merger talks with Spain's Iberia. Qantas had ruled out a three-way merger. "It was always going to be a difficult marriage and clearly there are a lot of pressures from outside the relationship that are being applied -- not least from Iberia and also within Qantas's institutional base," said Ian Thomas, analyst at aviation consulting firm CAPA Consulting. There were questions being asked about how much value it was going to bring to the organisation and whether they would be better off pursuing an Asian partner as opposed to a European one," added Thomas. Qantas, with a market value of about $3.3 billion, and BA, worth about $3.1 billion, are already code-sharing partners. (Reporting by Sonali Paul and Mark Bendeich; Editing by Michael Perry)