The Italian government is in exclusive negotiations with Certares, Delta Air Lines and Air France-KLM to acquire ITA Airways. Lufthansa and partner MSC are at a disadvantage.
It is an unusual duo: Lufthansa wants to take over ITA Airways together with the shipping giant MSC. And the German-Swiss alliance lasted for a long time as the clear favorite in the race for the Alitalia successor, which is being privatized. And so the people in Frankfurt were very sure that they would be awarded the contract.
Last week, however, it became apparent that the competition was getting stronger: the American financial company Certares, which bid with Delta Air Lines and Air France-KLM, promised the Italian state more say. That was a plus given the current balance of power in Rome. Nationalists are likely to win a majority in the elections at the end of September.
Exclusive negotiations with Cerates group
And now Lufthansa is actually losing out for the time being. On Wednesday (August 31), the Ministry of Economy and Finance announced that it had started “exclusive negotiations” with Certares, Delta and Air France-KLM. Their offer is more in line with the Italian government’s goals for the sale of ITA Airways.
At the end of the exclusive talks, however, binding agreements would only be signed “if the content fully satisfies the public shareholder,” states the Ministry of Finance. Both bidders had previously improved their offers somewhat. Lufthansa and MSC recently offered around 850 million euros for 80 percent, the group around Certares 600 million for around 58 percent.
What will the government do after the election?
Lufthansa’s competitors want to give the Italian state 42 percent of ITA. According to the newspaper La Repubblica, they also allow Italy to fill the ITA president and two out of five seats on the supervisory board. Apparently that went down well.
That should also go down better with the next Italian government, which will be elected on September 25 and is likely to be nationally minded. However, it is not certain whether she will actually stick to the declaration of intent negotiated by the current government of Prime Minister Mario Draghi.