Lufthansa to acquire 40% stake in premium Italian airline ITA Airways

Author : Pankaj Singh | Published Date : 2022-01-24 

Germany’s largest airline Deutsche Lufthansa AG is reportedly in talks to purchase a 40% share in Italy’s flag carrier ITA Airways in a deal that might be revealed next week.

Discussions about a partnership between the German partly state-owned Lufthansa and ITA Airways are currently in progress with a wide array of possible outcomes. However, the stake price is yet to be finalized, cited sources with knowledge of the matter.

An ITA spokesperson did not specifically mention Lufthansa but said that the airline’s top management is expected to reveal a strategic plan to the board of directors on 31st January. A data room will then be created to give potential bidders or partners easy access to key financial documents for determining the value of the company.

Italian centrist newspaper, Il Foglio reported that the two carriers could finalize the 40% stake acquisition next week as they have been in final rounds for agreeing over certain key conditions, such as the role of the Fiumicino airport in Rome as a center for hosting direct flights to Africa and the Americas.

As per sources, Lufthansa’s agreement with ITA Airways would be subject to approval by the European Union’s competition commission.

The Italian carrier had reportedly been in contact with British Airways, Lufthansa, and the U.S.-based Delta Air Lines for an equity partnership in early January, and formal talks could begin by the end of March this year.

Meanwhile, the German government currently owns a 14% share in Lufthansa after selling off a major portion during the peak of the COVID-19 pandemic in 2020 and seeks to sell the remaining stake by October 2023 at the latest.

Notably, Lufthansa airlines barely escaped becoming bankrupt in 2020, after Switzerland, Germany, Austria, and Belgium, provided it with the financial support of USD 10.19 billion approved by the European Commission.

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Pankaj Singh

Pankaj Singh

Endowed with a post graduate degree in management and finance, Pankaj Singh has been a part of the online content domain for quite a while. Having worked previously as a U.K. insurance underwriter for two years, he now writes articles for fractovia.org and other online portals. He can be contacted at- [email protected] | https://twitter.com/PankajSingh2605

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