Icelandair said on Thursday it had scrapped its all-share deal to buy WOW Air. The acquisition seemed like a done deal when it was first announced earlier this month. Icelandair said the conditions for the share purchase were “unlikely” to be filled by the company’s shareholder meeting, slated for Friday.
Shares in Icelandair tumbled 10 percent on the news.
“The planned acquisition of Icelandair Group of WOW air will not go through,” Bogi Nils Bogason, interim president and chief executive of Icelandair Group, said in a statement.
WOW Air has faced escalating financial problems, including higher fuel costs. Creditors have demanded stricter payment terms than before, putting further pressure on the WOW’s cash flow.