Air France-KLM buys Alitalia
Mar 17, 2008
Mergers and Acquisitions
Consolidation seems to be the name of the game in the international aviation industry as well, as Alitalia has accepted Air France-KLM’s $1.1 billion bid.
The Air France-KLM offer values the airline at $216 million, which is lesser than expected, with a share swap ratio of 1 Air France share for every 160 Alitalia shares. Air France-KLM would pay $946 million for convertible shares and inject $1.56 billion in capital once the deal is complete.
The stumbling block could be approval from the unions, in light of the almost 1,600 jobs on the chopping block. The offer must also be approved by the Italian government, which is selling its 50 per cent share, as well as the stock market regulator and EU competition authorities.
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