German airline giant Lufthansa submitted a fresh offer on Wednesday for Italy’s troubled ITA Airways, bringing a turbulent takeover process closer to the finish line.
Lufthansa’s proposal would see the carrier initially take a minority stake in state-owned ITA, with the option “to purchase the remaining shares at a later date”, it said in a statement.
No financial details were disclosed, but according to Bloomberg News the deal could see Lufthansa pay up to 350 million euros ($375 million) for a 40-per cent stake.
Italy’s previous government launched the process last year of selling off a majority of ITA Airways, the successor to loss-making national carrier Alitalia.
The government, under then-premier Mario Draghi, at first preferred a bid by US investment fund Certares, Delta Air Lines and Air France-KLM.
But when those negotiations failed to make headway, Italy’s new, right-wing cabinet under Prime Minister Giorgia Meloni declared in late October that the period of exclusivity talks had ended — putting Lufthansa back in the running.
The German group — which also owns Swiss, Brussels and Austrian Airlines — has always made clear it was interested in a “true privatisation” of ITA Airways.
Swiss shipping giant MSC had teamed up with Lufthansa in the first round of bidding but said in November it was pulling out, leaving Lufthansa to pursue the ITA deal alone.
Separately, Air France-KLM said Wednesday it had informed the Italian government it was dropping out of the race too, clearing the path for rival Lufthansa.
Lufthansa hopes to turn Rome into a key European hub, including by offering direct flights to Italy from the United States, its biggest market.
“For Lufthansa Group, Italy is the most important market outside of its home markets and the US,” the company said.
“Italy’s importance for both business and private travel lies in its strong export-oriented economy and status as one of Europe’s top vacation spots.”
ITA Airways replaced the national carrier Alitalia, which was put under state administration in 2017 after years of fruitless attempts to find a buyer.
The Italian state has spent more than 13 billion euros trying get the airline back on its feet over the past two decades.
Italy’s government agreed late last year to inject another 400 million euros into ITA to keep the airline afloat as the bidding process dragged on.
Article first published on the Punch Website