Icelandair Drops Wow Takeover, Stoking Jitters About Collapse

Icelandair Group Hf abandoned its plan to buy low-cost rival Wow Air Hf, sending the krona tumbling amid concern that the country’s tourism industry could be hit if the discounter collapses, Bloomberg News reported. Conditions required for the deal to go through weren’t met, Icelandair Chief Executive Officer Bogi Nils Bogason said Thursday, adding that “this conclusion is certainly disappointing.” The krona fell about 0.9 percent against the euro as investors fretted that the failed merger is bad news for an economy increasingly dependent on tourism after the bank failures of a decade ago. The deal’s collapse raises the specter of another airline bankruptcy in Europe following at least five already this year after overcapacity and high oil prices took a bite out of balance sheets. Wow on Tuesday said financial projections had worsened significantly since its bond issuance on Sept. 24 and that talks to secure long-term funds had become a necessity. Read more