Salem Radio Network News Thursday, May 19, 2022

Business

Germany’s Lufthansa in talks to buy 40% stake in Italy’s ITA Airways – sources

By Michael Nienaber and Giuseppe Fonte

BERLIN/ROME (Reuters) – Germany’s flagship carrier Lufthansa is in talks to buy a 40% stake in state-owned Alitalia’s successor ITA Airways, two people familiar with the negotiations said on Sunday, following a newspaper report that a deal could be unveiled next week.

The talks about a tie-up between Germany’s partly state-owned Lufthansa and ITA Airways are still ongoing with all outcomes possible, one of the sources said on condition of anonymity, adding the stake price was still under negotiation.

The second source said Lufthansa and ITA were in talks over a 40% stake sale, but it could take longer than a few days to reach a comprehensive deal.

A Lufthansa spokesperson declined to comment, but reiterated an earlier statement that the German carrier was open to the possibility of a partnership with ITA.

An ITA spokesperson, when asked for comment by Reuters on a potential investment by Lufthansa, did not mention Lufthansa but said that the airline’s top management would present a strategic plan to the company’s board on Jan. 31. A data room would then be opened in the following days, he added, allowing a potential bidder or partner to have access to key financial documents to assess the value of the company.

Italian daily Il Foglio reported on Saturday that the two companies could present a deal on a 40% stake next week as they were very close to agreeing over some key terms, such as the role of Rome’s Fiumicino airport as a hub for direct flights to Africa and some routes to the Americas.

Sources told Reuters on Jan. 12 that the Italian carrier was in contact with Lufthansa, British Airways and United States-based Delta Air Lines for an equity partnership, adding that formal talks could start by the end of March.

Delta said on Jan. 13 it has no plans to invest in ITA.

The German government currently holds 14% of Lufthansa shares following a bailout at the height of the coronavirus pandemic in 2020 and aims to sell its stake by October 2023 at the latest.

The group was saved from bankruptcy by Germany, Switzerland, Austria and Belgium with 9 billion euros ($10.21 billion) in financial support approved by the European Commission.

A German economy ministry spokesperson declined to comment.

A deal with ITA would be subject to approval by the European Union’s competition watchdog.

(Reporting by Michael Nienaber in Berlin and Giuseppe Fonte in Rome,; Additional reporting by Ilona Wissenbach in Frankfurt and Elvira Pollina in Milan; Editing by Susan Fenton)

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