The owners of Belgian carriers Virgin Express and SN Brussels Airlines have begun formal merger talks. A deal is expected to be finalised by the end of the year, writes Herman De Wulf.
Virgin Express shareholder VSIL and SN Brussels Airlines' majority shareholder SN Airholding signed a non-binding letter of intent on the deal, which would leave SN Airholding with 70.1% of the merged airline. The formal signing of the deal will follow regulatory approval of the merger, Virgin Express says.
SN Brussels chairman Rob Kuijpers says that the two airlines would continue to be managed separately as each addresses a different market. SN is a full service carrier while Virgin Express is low-cost.
SN Airholding will be given an option to buy out Virgin Express holding company VEX's share at will for €100 million ($124 million) by the end of 2006; VEX will also have the option to force SN Airholding to buy the stake for €64 million before the same deadline. If SN Airholding itself then sells out, VEX will receive a 20-29.9% share of the proceeds, with the exact amount depending on the sale date.
Source: Flight International