Germany's Lufthansa in talks to buy 40% stake in Italy's ITA Airways - sources
By Michael Nienaber and Giuseppe Fonte
BERLIN/ROME, Jan 23 (Reuters) - Germany's flagship carrier Lufthansa LHAG.DE 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 ICAG.L and United States-based Delta Air Lines DAL.N 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
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.