Alitalia chooses Air France as partner
Alitalia, whose 62 years as a state-run company ended in bankruptcy, begins its new incarnation as a private company with Air France-KLM as a minority shareholder alongside a varied group of Italian investors.india Updated: Jan 13, 2009 15:42 IST
Alitalia, whose 62 years as a state-run company ended in bankruptcy, begins its new incarnation on Tuesday as a private company with Air France-KLM as a minority shareholder alongside a varied group of Italian investors.
The Franco-Dutch carrier, which withdrew a failed bid last year to buy the Italian airline outright, will pay euro 322 million ($431.29 million) in cash and equity for a 25 per cent share in the new company, Alitalia's new CEO Rocco Sabelli said at a news conference yesterday after investors approved the deal at a board meeting.
Sabelli said Air France had a clear advantage in the bidding process because of its long-standing partnership in the Sky Team alliance and its earlier bid.
"The interest in the Italian market by the other bidders, including Lufthansa, did not translate into a real offer," Sabelli said.
The group of some 25 Italian investors including the chiefs of scooter maker Piaggio, the Pirelli tire company and a highway construction company bought the bankrupt airline from the Italian government in a euro 1.052 billion ($1.41 billion) deal. That includes euro 625 million in Alitalia's debt, which in the meantime has ballooned to at least euro 3.2 billion.
Roberto Colaninno, president of the so-called CAI investor group, said the Air France partnership will bring synergies of euro 720 million (964.37 million) over the first three years. However, rules will prevent Air France from expanding its participation for the first four years.