Italy in exclusive negotiations with Air France-KLM & Delta over ITA sales

  • ITA Airbus A330 flying in the sky

    ITA . Airlines

    IATA/ICAO Code:
    AZ / ITY

    Airline type:
    full service conveyor

    Rome Fiumicino Airport

    Year Founded:

    Sky Team

    Executive Director:
    Fabio Lazzerini


The Italian government has revealed that it is in exclusive negotiations with a consortium consisting of Certares, Air France-KLM and Delta Air Lines regarding the sale of national carrier ITA Airways. The group pushed back rival Lufthansa and MSC Group and now appears poised for the takeover. We take a closer look at this evolving story below.

Air France-KLM and the Delta consortium are the most likely to buy ITA

The sale of ITA Airways moved a step closer to reality after the Italian government announced it would start exclusive talks with equity fund Certares, Air France-KLM and Delta Air Lines. The Italian Ministry of Finance stated,

Today’s video is simple

“After exclusive talks, a binding agreement will only be signed if the outcome is fully satisfactory to the general shareholders.”

The ministry revealed that the Certares-led bid was more in line with its objectives and now appears to have seen a competing bid from German carrier Lufthansa and Swiss shipping group MSC.

Certares’ bid is worth €600 million for a 55% stake in ITA. Photo: Getty Images

As Simple Flying reported last week, bids for ITA Airways closed on August 23. The deadline for bids passed in May, but the Italian government claimed the bids were not good enough and called on the parties involved to resubmit the proposals.

ITA was valued at around 950 million euros, with Certares bid 600 million euros for 55% of the shares. This will be split into 40.1% for the US-based equity group, 9.9% for Air France-KLM, and 5% for Delta, with the remaining 45% remaining in the public sector holdings.

Lufthansa responds

The rejected model, Lufthansa, had already given a response after the Italian government’s announcement on Wednesday. Lufthansa said,

“We have taken note of the decision of the Italian government. Our joint offer with MSC was the best solution for the ITA, in our view. Apparently, a path is now being chosen that allows for more state influence and does not provide for complete privatization of the body.”

The fundamental difference in the two bids was that Air France’s offer KLM and Delta would give the Italian government a 45% stake in the airline, while Lufthansa’s proposal is said to not budge from its 20% offer to the state.

National elections next month

Although today’s announcement is promising news for the Certares-led show, everything could change depending on how the general election takes place next month. Based on recent opinion polls, a coalition led by the Italian right-wing party Fratelli d’Italia could come to power and reverse any privatization given its populist tendencies.

The current government wants to move forward with a deal before the general elections next month. Photo: Justin Hayward/Simple Flying

Italian Prime Minister Mario Draghi wants a quick deal, noting that the sale “It will not be left to the next government. We have to do our duty.“The current administration has set a September 10 deadline for reaching a tentative agreement, two weeks before the Italian general elections on September 25.

There are some other complications that need to be ironed out if the sale is to go smoothly. This includes Air France-KLM owed on billions of state-backed loans and a European Commission ban limiting shares of rival airlines to 10%, although Air-France KLM plans to take a 9.9% stake under current proposals.

Do you think the Italian government made the right decision? Do you think the Information Technology Authority will benefit from this deal? Let us know in the comments.

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