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Tags :Continental Europe, Alitalia, Air France-KLM, Partnership, consolidation
Alitalia and Air France-KLM have reached (12-Jan-09) an agreement to launch a new strategic partnership, cemented by Air France-KLM taking a minority stake in Alitalia.
The partnership between Alitalia and Air France-KLM will be based on a multi-hub strategy, until today focused on Paris Charles-de-Gaulle and Amsterdam Schiphol, and that will be strengthened by the introduction of Rome Fiumicino and Milan Malpensa on an equal basis.
Synergies deriving mainly from network optimisation and revenue management will be achieved progressively over the next three years and should amount to some EUR720 million for Alitalia.
A “Partnership Manager” responsible for implementing the partnership strategy and
overseeing the generation of synergies will be appointed for a term of three years, renewable once, and will be appointed on a rotating basis by the two groups.
The strategic partnership
Air France-KLM will underwrite a reserved capital increase of approximately 323 million euros, giving Air France-KLM a 25% equity interest in the new Alitalia.
The Air France-KLM Group will have three seats out of a total 19 on Alitalia’s Board of Directors, including two of the nine members making up the Executive Committee of the Board of Directors.
A lock-up period is agreed for 4 years. Up to 12-Jan-13, no Italian shareholder will be able to transfer shares externally to the Alitalia shareholder group or to Air France-KLM During the fifth year – between 13-Jan-13 and 28-Oct-13 – the transfer of shares to third parties will be possible, but only on condition that the other shareholders have not exercised their pre-emption rights and that the transfer is approved by Board of Directors of Alitalia. The lock-up will cease to apply only in the case of a stock market quotation starting as of the third year.
The implementation of the agreement is subject, inter alia, to approval by the Alitalia General Meeting of Shareholders. The approval of competition authorities, including those of the European Union, could be forthcoming before the end of the 1Q09. The
agreement would come into force at that time.
(c) Centre for Asia Pacific Aviation. Date posted: 13-Jan-09
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Alitalia and Air France-KLM launch new strategic partnership 
