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Germany’s Lufthansa to acquire 20% stake in Italian carrier ITA airways

Germany’s Lufthansa to acquire 20% stake in Italian carrier ITA airways

Deutsche Lufthansa AG is reportedly planning to buy a 20% stake in ITA Airways, a state-owned Italian carrier, while its partner MSC is looking to capture a 60% stake.

In May 2022, Italy's Economy and Finance Minister Daniele Franco formally revealed the three bids for ITA Airways: Delta Air Lines and Air France-KLM, Lufthansa and MCS, and private Indian equity firm Indigo Partners.

ITA Airways, which began operations in October 2021 and is run by the Italian government, intends to service 45 destinations across 61 routes in 2022, with added plans to expand to 74 locations and 89 routes by 2025.

The airline's official website stated that ITA plans to gradually increase its existing fleet of 52 planes to 78 planes in 2022 and 105 planes by the end of 2025.

According to internal sources, the Italian government will continue to maintain the remaining 20% stake. MSC, which is referred to as Mediterranean Shipping Group, had submitted an offer along with Lufthansa and is awaiting further developments.

After the deadline for bids on 23rd May, the Italian Treasury choose not to respond to a request for a remark on the auction process. MSC and Lufthansa are up against an offer from Certares, a U.S. financial investor that is partnering with Delta Air Lines and Air France-KLM.

Delta said in a statement that it wouldn't be a financial stakeholder in ITA Airways but would prefer to expand an existing commercial contract with the company. It has launched USD 2.4 billion share sales to strengthen its balance sheet, putting it closer to restoring government economic assistance, and meeting European Union rules for future airline mergers.

According to media reports, the Alitalia successor is currently worth USD 2.5 billion. In the following weeks, a decision is expected as to which of the two bidding parties would be invited to begin exclusive negotiations.

Source Credits –

https://money.usnews.com/investing/news/articles/2022-05-24/lufthansa-bids-for-20-stake-in-ita-airways-source

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Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.