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BA to reign in Spain
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February 12, 1999: 2:35 p.m. ET
British Airways and American Airlines are buying a 10 percent stake in Iberia
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LONDON (CNNfn) - British Airways confirmed Friday it will take a 9 percent stake in Spanish airline Iberia in a move that will signal the total privatization of the Spanish flag carrier by the end of the year.
At the same time, American Airlines, owned by AMR (AMR), said it is buying 1 percent of the government-owned airline in a long-awaited deal that values Iberia at $3.57 billion. The agreement was signed Friday by representatives of all parties in Madrid. American's investment is subject to regulatory approvals.
BA (BAY) paid about $350 million dollars for its stake and, together with its U.S. partner, invited the Spanish flag carrier to become the seventh member of the so-called "oneworld" alliance grouping.
Iberia intends to join the alliance at a meeting of all the member airlines in Sydney, Australia, on Monday.
Spanish financial institutions will buy another 30 percent of Iberia "in the next couple of months," the company said in a statement.
The final step toward privatization will see the Spanish government sell 60 percent to retail investors. Probably as early as July, a source said.
The move comes only days after the French government announced the pricing of the initial public offering of Air France.
The French and Spanish flotations will complete the privatization of all the major airlines in Western Europe. The Italian government is also in the process of selling off Alitalia.
In a separate development, BA's chairman Colin Marshall said he expected Japan Airlines to join the "oneworld" alliance at some point in the future. The alliance grouping currently consists of American Airlines, BA, Canadian Airlines, Cathay Pacific, Finnair, and Qantas.
Japan Airlines already has separate deals with both BA and American Airlines. 
--from staff writer Mark Odell
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British Airways
Iberia
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