FL Group, parent of Icelandair, as expected, reached agreement with Sterling parent Fons Eignarhaldsfelag to acquire the Danish low-fare airline for DKK1.5 billion ($241 million) including DKK1.1 billion in cash and DKK400 million worth of shares in FL Group
The purchase price is subject to Sterling's achieving EBITDA for 2006 of at least DKK345 million. Should it fall short, the price may be reduced by up to DKK500 million. Conversely, it may be increased if Sterling exceeds its cash flow target. FL will take over operation of the carrier on Jan. 1, subject to approval of relevant competition authorities.
Sterling, which recently absorbed Maersk, will be operated as an independent company focusing on charter and tourism markets with an emphasis on southern Europe. It operates 30 737s and expects to carry 5.2 million passengers next year. Palmi Haraldsson will continue as chairman of the airline's board with Almar Orn Hilmarsson staying on as CEO.
