LH announced an out-of-court settlement with the UK company regarding its purchase of Chairman Michael Bishop´s 50%-plus-one-share stake, a transaction placed in jeopardy last month when Bishop took LH to court over the German company´s demand for a recapitalization (ATWOnline, May 22).
Bishop agreed to accept a £175 million payment for the cancellation of LH´s put option, which was tied to certain performance conditions. On July 1, a UK-based company called LHBD Holding will acquire Bishop´s stake for "approximately" £48 million. Lufthansa initially will hold 35% of LHBD and, once it obtains necessary traffic rights, will acquire the remainder.
Meanwhile, the EC approved LH´s investment in and future merger with Brussels Airlines, saying that "the comprehensive remedies package offered by Lufthansa will facilitate market entry on the affected routes and thereby create alternative choices for passengers." LH will acquire a 45% stake in parent company SN Airholding for €65 million in a first stage, with an option to acquire the remainder in 2011 (ATWOnline, Jan. 27).
The EC opened an investigation of the LH/SN deal in January, arguing that the combined carrier "could significantly impede effective competition," particularly on routes from Belgium to Germany and Switzerland. To address those concerns, Lufthansa offered slots allowing new entrants to operate flights from Brussels to Frankfurt, Munich, Hamburg and Zurich. Any new entrant will obtain grandfathering rights over the relevant slots once it has operated a route for a predetermined period.
The EC still is analyzing LH´s proposed acquisition of Austrian Airlines, for which it has set a July 1 deadline.
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