Icelandair and WOW Merger Dropped Skip to content

Icelandair and WOW Merger Dropped

By Yelena

Photo: Flug Flugvöllur flugáhöfn Flugfélög.

Icelandair Group will not go forward with their purchase of WOW air, RÚV reports. According to Icelandair’s statement to the Iceland Stock Exchange, the decision to back out of the purchase agreement signed November 5 was a mutual one between the two companies.

In a statement released on November 26, Icelandair Group asserted it was unlikely that WOW air would fulfil all conditions required by the purchase agreement before a shareholders’ meeting to be held November 30. The company’s most recent statement says the situation remains unchanged, and on that basis Icelandair Group’s board of directors cannot recommend to their shareholders to move forward with the purchase agreement. The board does intent to propose a postponement on the decision-making at tomorrow’s meeting.

“The management and directors of both companies have worked wholeheartedly on this project. The outcome is certainly a disappointment,” stated Bogi Nils Bogason, CEO of Icelandair Group. He thanked WOW air’s management for their good cooperation and wished the company’s owners and staff all the best.

Skúli Mogensen, CEO and founder of WOW air, stated it was clear from the outset that the merger was an ambitious project. “We thank the management of Icelandair Group for their cooperation in this challenging project and also wish the management and staff of Icelandair Group all the best.”

When asked whether layoffs would be in the cards at the company, Skúli did not rule out the possibility, saying “it could be the case.” Skúli is in talks with another party about the purchase of WOW air, but has refrained on commenting as to who the party is or how far the talks have gone. Svanhvít Friðriksdóttir, public relations officer at WOW, stated the company was in a secure position to continue operations, but would not confirm for how long. Employees have been told they would receive their salaries as usual at the end of the month.

Icelandair shares fell sharply after the announcement the purchase would not go forward, showing a 10% drop around 11.00am this morning.

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