Aegean, Olympic Air Agree To Merge

February 22, 2010

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Greece's two largest carriers Aegean Airlines and Olympic Air said on Monday they have agreed to merge to form a stronger airline better able to compete with European peers.

"The company that will be formed as a result of the merger will carry the name and logos of Olympic Air, following the necessary transition and adjustment period during which the name and logos of Aegean will be used in parallel," they said in a joint statement.

Under the agreement, which is subject to approval by the European Competition Commission, the main shareholder of Aegean and the sole shareholder of Olympic Air will have equal shareholdings in the combined entity.

Olympic Air was bought by buyout firm Marfin Investment Group (MIG) from the Greek government in March last year. Aegean Airlines had also offered to buy Olympic.

The Olympic privatisation ended years of wrangling with the EU Commission over illegal state aid to the debt-laden flag carrier.

"Aegean Airlines' market capitalisation stands at EUR€285 million euros and MIG had acquired Olympic for EUR€177.2 million. The new group might drop some destinations in favour of the competition in order to surpass any obstacles by the competition committee," Alpha Finance said in a note.