British Airways owner IAG scraps deal to acquire Air Europa

British Airways owner IAG terminated its proposed takeover of Spain's Air Europa on Thursday, citing regulatory environment concerns, less than two months after it offered remedies to antitrust regulators to secure an approval for the deal.

IAG had offered concessions to the European Commission in June, after the watchdog warned the deal could reduce competition.

EU antitrust regulators had been poised to block the deal after IAG declined to offer additional remedies to address their concerns, people with direct knowledge of the matter said.

"The board of directors has concluded that in the current regulatory environment it would not be in the best interests of shareholders to continue with the transaction," IAG said, adding that it would pay Air Europa 50 million euros ($54 million) as termination fee.

Air Europa officials were not immediately available for comment. Air Europa owner Globalia was also not immediately available.

IAG had announced last year that it would buy out the 80 per cent of Air Europa it did not already own for 400 million euros. The company would retain its 20 per cent stake in Air Europa.