Lufthansa-ITA Airways Merger Talks Stall Over Price Dispute

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Merger negotiations between Lufthansa and Italian airline ITA Airways have reportedly stalled due to Lufthansa’s request for a €10 million ($11 million) reduction in the purchase price of the Rome-based carrier. Sources close to the negotiations indicate that this request has created an obstacle in the ongoing discussions.

In an effort to resolve the deadlock, Italian Minister of Economy and Finance Giancarlo Giorgetti is scheduled to meet with Lufthansa CEO Carsten Spohr in the coming days. The agreement, initially reached in 2023 and approved by the European Commission in 2024, entails Lufthansa acquiring a 41% stake in ITA Airways for €325 million ($358 million), with plans to increase its stake to 100% by 2033 for a total investment of €829 million ($912 million).

However, negotiations hit a snag during talks on November 4, 2024, between Lufthansa and Italian government officials. Lufthansa’s request for a reduction on the second tranche of payments, which exceeds €500 million, was based on costs incurred from investments made since the 2023 agreement. In contrast, Italian officials argue that ITA’s financial situation has improved, making a price reduction unjustified.

Time is running short for both parties, as the European Commission has set a deadline of November 11, 2024, for all takeover-related submissions. There is a growing sense of urgency to find a resolution, with sources indicating that trust between the two parties has been “significantly compromised.” Giorgetti expressed concern that the stalemate reflects a crisis of confidence that could damage relations further.

Related News : https://airguide.info/?s=Lufthansa

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