September 25, 2022

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Ita Airways, Treasury selects consortium Certares-Air France-Delta- Corriere.it

ETA’s flight profile has reached a turning point. The Ministry of Economy and Finance immediately began, on August 31, “exclusive negotiations with a consortium composed of Certares, Delta Air Lines and Air France-KLM”. This was confirmed in a memo by the Directorate “Following the action governed by dpcm of February 11, 2022 aimed at transferring control of the ITA SpA (as the company headed by Ita Airways is called, so).” The decision is not without some surprises because even a few days ago the proposal from MSC and Lufthansa was given an advantage.

motives

The statement continues that the US fund-led offer according to the Treasury – which is today the Italian company’s only shareholder – was “considered more in line with the objectives set by the Prime Minister’s Office”. The ministry asserts that “at the conclusion of the exclusive negotiations, only binding agreements will be signed in the presence of completely satisfactory content for the public shareholders.”

The turning point

The tipping point – from what was learned – was recorded between Monday 29 and Tuesday 30 August. It would also have been possible to convince the Certares-Delta-Air France bid that if the general shareholder left 45% of Ita in Rome, there would be more control over the future of the company that took off last October 15 instead of Alitalia. On the other hand, it was not possible to estimate the rigidity of MSC-Lufthansa on the distribution of shares (the two giants wanted to acquire 80%, leaving 20% ​​to Mef).

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the two shows

ETA Airways is valued by both consortiums at around 950 million euros. According to the filter, Certares will pay 600 million euros for 55% and give the Italian state two out of five members of the board of directors with broad veto powers over industrial and strategic options and the possibility of appointing a president. Air France-KLM was already a shareholder in Alitalia, reaching 25% in 2009, only to gradually reduce its stake from 2013. In the coming months – according to Certares’ promises – Air France and Delta should become shareholders: the former with 9.9% and the latter By 5%, thus reducing the US fund’s stake to 40.1%.

US Fund

Certares was established in 2012 and the CEO is Greg O’Hara (who holds dual Greek-Canadian citizenship). The fund is headquartered in New York, and has offices in Luxembourg and Milan for a few months. Shahadat’s private equity fund invests in the travel, tourism and hospitality sectors – it has stakes in American Express, Global Business Travel, TripAdvisor, Hertz – with a market capitalization of more than $10 billion (given joint investments).

Lufthansa memo

“From our point of view, our joint offer with MSC has been and continues to be the best solution for Ita,” Lufthansa says in a note. “We take note of the decision of the Italian government to take a path that allows greater influence of the state and does not provide for the complete privatization of ITA – this is confirmed by the giant of the skies -. Even without cooperation with Ita, our group maintains an excellent position in the Italian market. With the Italian airline Air Dolomiti and all brands For our airlines, we already have a strong presence, with around 4 million passengers and more than 130 daily departures from 21 destinations. We will continue to expand this position with our strength and further develop our offer to provide the best service to our Italian customers and passengers.”

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The French position

In the afternoon, a note from Air France-KLM also arrived. The group welcomes, as reported, “the Italian government’s announcement of an exclusive grant to the consortium formed by Certares – as a capital partner – and Air France-KLM and Delta Air Lines – as commercial partners – for the next stage of negotiations on the possibility of acquiring a stake directly owned by the Ministry of Economy and finance in the Italian government. If this process is completed, Air France-KLM will become a commercial and operating partner of Air Italy within the consortium led by Certares. As explained several times before courier Air France-KLM is therefore not investing in ETA’s capital structure at this stage. However, Air France-KLM Group could consider acquiring a minority stake in Ita in the medium term.”