El Al informed the Tel Aviv Stock Exchange on Thursday that it has signed a Memorandum of Understanding to acquire Arkia Israeli Airline’s shares.
The company’s board of directors approved the deal the day before.
“Approval of the MOU is another step on the path towards signing a binding agreement,” said El Al chairman Amikam Ben-Zvi, though he cautioned that “we still have a long way to go before the deal to acquire Arkia is completed.”
El Al’s intention is to integrate Arkia into its overall strategic vision of being more than an airline, said company CEO Avigal Soreq.
“El Al is entering an era in which it will allow travelers to Israel to enjoy a complete tourism package that includes, among other things, a very high-level flight experience, a wide range of hotels and accommodation options; ground services, including car-rental and public-transportation management applications; insurance products; and tickets to a variety of attractions and events,” said Soreq.
If the purchase goes through, Arkia will maintain its brand and operate independently as a subsidiary of El Al.
“Arkia’s strategic connection with El Al will allow the two companies to make better use of their joint resources to carry out professional aviation and tourism activities under one umbrella,” said Arkia CEO Gadi Tepper.
Arkia’s employees, who have a 30% stake in the company, and the Israel Competition Authority must still approve the agreement.
