Virgin Atlantic takeover: Soaring To New Heights?

What’s Going On Here?

Virgin Atlantic are in talks with Flybe over a potential takeover. 

What Does This Mean?

The regional airline Flybe has been struggling recently, resulting in directors putting it up for sale earlier this month. This takeover could put the airline out of its misery as, since the takeover reports, Flybe’s stock has already climbed by a whopping 70%! Why would such a prominent airline be interested in this loss-making mess? Rumour has it that Flybe’s operations in Heathrow would prove to be a lucrative asset to Virgin. If such a deal goes through, it would surely be an Easter egg for Virgin in terms of providing more feeder flights and having cheaper access to the airport’s take-off and landing slots.  

Why Should Firms Care?

This is yet another example of a big merger that creates numerous opportunities in the legal sphere and also highlights the effects of Brexit negotiations on commercial business. Virgin Atlantic previously tried to crack the UK regional market through launching Little Red airline to little success, making this deal one of remarkable importance. It remains to be seen whether such a move this time round will have similar consequences…    

With such an important partnership on the line, neither party will be looking to pass this up. Speculation surfaced that other commercial airlines, including British Airways, may be in the hunt for Flybe, piling more pressure on Virgin to get the deal over the line. Considering the magnitude of such a deal for both parties, the surfacing of this takeover clearly provides promising opportunities for lawyers in commercial law firms. Pressure will be placed on firms, from these clients, to advise and ensure that the various terms and aspects of the agreement are in place for the deal to go through. 

This story also brings to light the consequences of the Brexit negotiations. Flybe’s recent struggles are an example of the toll the weaker British pound has had on smaller, regional companies. There is no doubt that Flybe is not the only business suffering from the effects of Brexit and with the possibility of an increase in mergers, this could be a very busy time for M&A lawyers in commercial law firms. 

Report written by Joshua L.

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