El Al in merger talks with Arkia

El Al Photo: PR Danny Sadeh

El Al has notified the TASE that initial talks are underway to buy the rival Israeli airline in an all-share deal.

El Al Israel Airlines Ltd. (TASE:ELAL) has notified the Tel Aviv Stock Exchange (TASE) that it is in initial talks to buy Israeli rival airline Arkia. El Al said, 'Talks have begun with Arkia to examine a possible deal in which the company would buy Arkia's shares in exchange for an allocation of the company's securities to Arkia shareholders."

In 2018, the Israeli Competition Authority refused to allow El Al to merge with Israir due to fears that competition on the route to Eilat would be compromised. But talks of possible mergers between Israeli airlines has resurfaced in the wake of the Covid pandemic and the struggle for airlines to survive the crisis.

Many travel experts feel that a merger is necessary due to the relatively small size of Israel's market and the plight of the airlines. Such a merger would allow El Al to focus more on North America while Arkia would complement it with shorter haul routes to Europe and vacation packages, where El Al has not been particularly strong.

El Al stressed in its announcement to the TASE that, "No memorandum of understanding or agreement has been signed between the parties and the negotiations are only at the outset. There is no certainty that a potential deal will be formed and a binding agreement will be signed between the parties, and if a binding agreement will be signed, there is no certainty that all the required approvals according to law would be received for completing the potential deal."

Published by Globes, Israel business news - en.globes.co.il - on October 18, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

El Al Photo: PR Danny Sadeh
El Al Photo: PR Danny Sadeh
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