- IATA/ICAO code:
- Airline type:
- Full service carrier
- Rome Fiumicino Airport
- Year of foundation:
- Fabio Lazzerini
The Italian government has revealed that it is in exclusive negotiations with a consortium made up of Certares, Air France-KLM and Delta Air Lines regarding the sale of national carrier ITA Airways. The group has withstood competition from Lufthansa and MSC Group and now seems ready to take control. We take a closer look at this developing story below.
The Air France-KLM and Delta consortium leads the takeover of ITA
The sale of Italian airline ITA Airways has moved closer to reality after the Italian government announced it would enter into exclusive talks with investment fund Certares, Air France-KLM and Delta Air Lines. The Italian Ministry of Finance said,
“After exclusive talks, a binding agreement will only be signed if the outcome is fully satisfactory to the public shareholder.”
The ministry revealed that the bid led by Certares was more in line with its objectives and now appears to have rejected a competing bid from German carrier Lufthansa and Swiss shipping group MSC.
Certares’ offer is for 600 million euros for a 55% stake in ITA. Photo: Getty Images
As Simple Flying reported last week, bids for ITA Airways closed on August 23. The original tender deadline passed in May, but the Italian government claimed the bids weren’t good enough and invited interested parties to resubmit proposals.
ITA was valued at around €950 million, with Certares’ bid reportedly offering €600 million for a 55% stake. That will break down to 40.1% for the US-based equity group, 9.9% for Air France-KLM and 5% for Delta, with the remaining 45% remaining in public hands.
Rejected bidder Lufthansa has already offered a response following the Italian government’s announcement on Wednesday. Lufthansa said,
“We take note of the decision of the Italian government. Our joint offer with MSC was the best solution for ITA, from our point of view. Apparently, a path is now chosen which allows for greater state influence and does not foresee of a full privatization of the ITA.”
A critical difference between the two offers was that Air-France KLM and Delta’s proposal would grant the Italian government a 45% stake in the airline, while Lufthansa’s proposal would not budge from its 20% offer at the time. ‘State.
National election next month
While today’s announcement is promising news for the Certares-led bid, that could all change depending on how the general election plays out next month. According to recent polls, a coalition led by the right-wing Fratelli d’Italia party could come to power and reverse any privatization given its populist leanings.
The incumbent government wants to push through a deal before the general election next month. Photo: Justin Hayward/Simple Flight
Italian Prime Minister Mario Draghi wants to quickly reach an agreement, specifying that the sale process “will not be left to the next government; we must do our duty.“The current administration has set September 10 as the deadline for a preliminary agreement, two weeks before the Italian legislative elections on September 25.
There are other complications that also need to be ironed out if the sale is to go smoothly. This includes Air France-KLM which owes billions in state guaranteed loans and a European Commission ban which limits stakes in competing carriers to 10%, although Air-France KLM is considering taking a 9% stake. .9% under current proposals.
Do you think the Italian government made the right decision? Do you think the ITA will benefit from this agreement? Let us know in the comments.
Italy in exclusive negotiations with Air France-KLM and Delta on the sale of ITA