- To operate separately, but integrate networks more closely
- Norwegian sees 200-300 mln crowns of synergies
- Deal financed from available funds, seen closing by end Q4
OSLO, July 6 (Reuters) - Norwegian Air has agreed to buy domestic peer Wideroe for 1.13 billion crowns ($106 million) as the reborn airline looks to strengthen its position in its home region.
The deal is the latest reshuffling in the Norwegian airline sector that saw newcomer Flyr file for bankruptcy in January having failed to raise enough cash to survive the winter season.
The two companies, which have been collaborating on routes since last year, will continue to operate independently, but the networks will be more closely integrated in the future, Norwegian Air CEO Geir Karlsen said.
"This will make it more attractive for passengers," he told a news conference.
"In addition, I believe it can bring economies of scale," he said, adding this could be areas such as purchases, maintenance, IT services or ground handling.
Privately-held Wideroe, Scandinavia's largest regional-only airline, serves short-haul routes in a sparsely populated region with few train lines and challenging geography.
An important part of the regional infrastructure, Wideroe owns 40 Bombardier Dash 8 aircraft, and three Embraer E190-E2 jets, with seat numbers in each plane ranging from 39 to 110.
The deal comes only two years after Norwegian Air emerged from bankruptcy protection with a smaller fleet and its debt almost wiped out, having raised cash. It has since increased its fleet from 51 aircraft to 81 Boeing 737-800s and 737 MAX 8s.
Norwegian Air said the two carriers had very limited overlap on routes, and it saw potential annual synergies from the acquisition of 200-300 million crowns ($18.8-28.2 million).
Karlsen said there were no plans to cut staff as a result of the deal, which Norwegian expects to close by the end of the fourth quarter and finance from available funds.
($1 = 10.6457 Norwegian crowns)
Reporting by Louise Breusch Rasmussen and Victoria Klesty Editing by Anna Ringstrom and Mark Potter
Source: Reuters