Austria Approves Lufthansa To Buy Austrian Airlines
The Austrian government today gave the go-ahead for Lufthansa to purchase a 41.56 percent stake in Austrian Airlines, paving the way for a complete acquisition of the Austrian flag carrier by Germany's dominant airline.
Lufthansa said it agreed to purchase the stake from Österreichische Industrieholding, the Austrian nationalized holding company, for €366,269 in addition to a "debtor warrant" that could total up to €163 million "depending on Austrian Airlines' economic performance and the Lufthansa share outperforming its competitors," Lufthansa said.
Lufthansa's board yesterday approved the carrier's bid to purchase up to 100 percent of the Austrian flag carrier. "In the course of the period specified by Austrian takeover law, Lufthansa will also make a public takeover bid to Austrian Airlines' free float shareholders," Lufthansa said in statement, offering a price of €4.44 per share, which could add €215 million to the overall price tag.
"At the same time, Lufthansa will receive a payment of €500 million to compensate for the negative shareholder value of Austrian Airlines," Lufthansa said in a statement, though the carrier would assume any other Austrian debts.
Peter Michaelis, CEO of ÖIAG, said in a statement today, "Austrian Airlines will remain a legally independent company, with its head office in Austria and its own brand, crew and fleet."
Lufthansa CEO Wolfgang Mayrhuber in a statement cheered the arrangement but said, "We also want to be quite clear about one thing, however: Austrian Airlines must become profitable again. If it is to do this, all those involved must make a contribution. We are making a considerable commitment with the transaction announced today—and are happy to do so. The Austrian Federal Government has also announced its intention to offer support. We also expect this solidarity and responsibility for the future of Austrian Airlines from all other partners, as only in this way can we build a strong, long-term perspective for this well-established airline."