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Rome authorizes the privatization of ITA Airways (Alitalia)

Rome authorizes the privatization of ITA Airways (Alitalia)

During a council of ministers on Friday, the Italian government gave the green light to the privatization of the public company ITA Airways. This announcement comes less than three weeks after the announcement of negotiations with Lufthansa and MSC, wishing to acquire the majority of its capital. A boon for Rome which has sought for years to get rid of its former national airline Alitalia, which gave birth to the current one, in vain.

tOn had left ITA Airways last January with an expression of interest received from Lufthansa and MSC to enter its capital. Following this Friday, February 11 during the Council of Ministers, where the Italian government  "adopted a decree allowing the start of the process of finding partners for ITA Airways",  with a view to a  "public offer or direct sale",  declared Daniele Franco, the Minister of Economy. Rome thus gives the green light to the privatization of its public company.

“We expect that, in a first phase, the government will retain a minority and non-controlling share, which can be sold later” , specifies the minister. And to add:  "We do not have a program with a predetermined timetable" , indicating that there were  "interested" candidates,  without mentioning specific buyers. The enterprise value of ITA Airways is estimated at between 1.2 and 1.4 billion euros, a financial source told AFP.

Finally no exclusivity for MSC and Lufthansa

A priori, ITA Airways should give access to its financial data ("data room") to all suitors, without granting MSC and Lufthansa the  "period of 90 days of exclusivity"  for the negotiations that the duo had requested. Together, they had proposed in January to buy  "the majority of the capital"  of ITA Airways and had asked that the Italian government  "retain a minority stake in the company".

MSC and Lufthansa are not the only ones interested, however. Air France-KLM also wants to acquire the majority of the capital of the Italian public company. The two groups have been competing for twenty years to attract ITA Airways, ex-Alitalia, into their respective folds and take advantage of the powerful Italian market.

Until January, Air France-KLM seemed to have the advantage over its competitors, with a long common past with Alitalia and code-sharing agreements for intra-European connections with ITA Airways. But the ability to invest of Lufthansa, which has partnered with the Italian-Swiss shipowner MSC, could tip the balance in its favor.