Air France-KLM and Air One on Thursday submitted rival non-binding offers to take control of loss-making Alitalia from the Italian government, in the next stage of consolidation for the European airline industry. Germany’s Lufthansa, which was considering a bid, said it was not interested because of the financial risk. The expressions of interest represent a breakthrough for the centre-left government of Romano Prodi, the prime minister. The government’s efforts to auction its 49.9% stake collapsed last July with no bidders. But officials cautioned that a deal was by no means certain and that bankruptcy was still a last resort. The FT’s Paul Betts says that while Air One has the edge in offering an Italian solution, Air France is probably in a stronger position given its international scale and resources.  But Jean-Cyril Spinetta, Air France chief, will have to brush up his famed negotiating skills to deal with Italian unions, which have financially grounded Alitalia.

This entry was posted by Gwen Robinson on Friday, December 7th, 2007 at 5:46 and is filed under Capital markets, M&A. Tagged with air france-klm, air one, alitalia. Edit this entry.