A deal for Icelandair to buy its low-cost rival WOW has fallen through.
In an email to staff today, WOW CEO Skuli Mogensen said it was his aim to keep the airline running as an independent company.
He added that he hoped to bring good news to his staff soon.
Icelandair signed a purchase agreement to buy WOW on November 5, but last Monday the group issued a stock exchange release stating that the company believed it would be unlikely that all the conditions in the share purchase agreement would be fulfilled by the shareholders’ meeting on Friday.
An announcement from Icelandair added: Therefore, it is unlikely that the Board of Directors of Icelandair Group can recommend to the shareholders that they agree to the purchase agreement.
Furthermore, the Board does not intend to submit to the shareholders’ meeting a proposal to postpone decision-making on the purchase agreement. Due to this this situation, both parties agree to abandon the aforementioned purchase agreement."
Icelandair interim president and CEO Bogi Nils Bogason said: "The planned acquisition of Icelandair Group of Wow air will not go through. The Board of Directors and management of both companies have worked on this project in earnest. This conclusion is certainly disappointing.
"We want to thank WOW air’s management for a good cooperation in the project during recent weeks . All our best wishes go out to the owners and staff of the Wow air."
Mogensen said: "It was clear at the outset that it was an ambitious task to complete all the conditions of the share purchase agreement in this short period. We thank the Icelandair Group’s management team for this challenging project, and also wish the management and staff of Icelandair Group all the best."
