Iberia Hires JP Morgan To Help With BA Merger - Sources
Last update: 11/4/2009 11:19:19 AM


By Christopher Bjork
Of DOW JONES NEWSWIRES


MADRID (Dow Jones)--Spanish airline Iberia Lineas Aereas de Espana SA (IBLA.MC) has hired JP Morgan Chase (JPM) to help it close a planned merger with British Airways PLC (BAY.LN), according to people familiar with the situation.
The hire is likely to add fresh blood to a negotiation process that has been dragging for more than a year, these people said. Morgan Stanley (MS) is also advising Iberia. BA, in turn, is advised by Swiss bank UBS AG (UBS).
JP Morgan, headed in Spain by Enrique Casanueva, is a trusted adviser of Antonio Vazquez, who was recently appointed chairman of Iberia. JP Morgan helped Vazquez negotiate a merger agreement with Imperial Tobacco Group PLC (ITY) when he headed Spanish tobacco giant Altadis SA.
A JP Morgan spokeswoman declined to comment. Morgan Stanley didn't immediately return a call seeking comment.
Executives at Iberia and BA have said they hope to announce a merger agreement before the end of the year. However, as important as the merger talks are, they've been eclipsed with real-world problems at both carriers.
A drop in air traffic and particularly in business travel has led both BA and Iberia to report losses in recent quarters, forcing them to make additional staff and cost cuts. Both are also battling with unions that are staging or threatening strike action.
An Iberia spokesman declined to comment. A spokesman at BA also declined to comment.
BA on Friday will publish fiscal first-half results--expected to be among its worst ever--and may give an update on the merger talks.
Company Web site: www.iberia.com
-By Christopher Bjork, Dow Jones Newswires, +34 91 395 81 23, christopher.bjork@dowjones.com
(Daniel Michaels of The Wall Street Journal contributed to this article.)
(END) Dow Jones Newswires
November 04, 2009 11:19 ET (16:19 GMT)