Lufthansa takes first step in Italy’s ITA Airways takeover #ItalyFinance

Germany’s Lufthansa announced on Friday that it has taken the first step towards a takeover of Italy’s state-owned ITA Airways by completing an approved capital increase of €325 million ($334 million).

Lufthansa has thus secured 41% of ITA shares, with the rest still held by the Italian state.

Full takeover of ITA, the successor to Alitalia, has been agreed with the Italian government. The airline operates 99 planes and has a staff complement of 5,000.

In a second step, Lufthansa is to take a 90% stake and then to complete takeover once the operating figures have been agreed.

In an interview with Germany’s Frankfurter Allgemeine newspaper, Lufthansa CEO Carsten Spohr said it was in the company’s interest to keep the Italian government on board, but that a 100% takeover was the ultimate aim.

A price of €829 million had been agreed, including a variable component, he said.

“We are proud to finally welcome ITA Airways to the Lufthansa Group. I would like to thank everyone who has contributed to this, especially in Rome, Brussels, Berlin and Frankfurt,” Spohr said in a statement.

“The ITA Airways team has written an impressive success story in recent years and, with great energy, passion and expertise, has built an airline that is already the pride of an entire nation.”

“We look forward to continuing this success story of ITA Airways together. With our investment, we will now strengthen the Italian and European aviation market and the position of the Lufthansa Group as number one in Europe,” he added.

The European Union passed the deal under strict competition provisions after lengthy negotiations. It includes ITA surrendering take-off and landing slots in Milan and Rome to EasyJet.

ITA will also be required to transport passengers from competitors Air France and the International Airlines Group (IAG) – the British-Spanish parent company of airlines such as British Airways and Iberia – to their respective hubs under preferential terms.

The 27 new EasyJet links to a number of European cities aims to limit Lufthansa’s reach. The company is already the airline with the largest turnover in Europe.

As part of the deal, Lufthansa chief strategist Jörg Eberhart is to take over at ITA as chief executive.

Spohr praised the progress made at ITA. “We look forward to continuing this success story of ITA Airways together. With our investment, we will now strengthen the Italian and European aviation market and the position of the Lufthansa Group as number one in Europe,” he said.

ITA will be the fifth airline in the Lufthansa Group, which also includes Swiss, Austrian and Brussels Airlines.