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Italy in talks to sell ITA Airways to Delta, Air France-KLM and US fund

Italy is in exclusive talks to sell a controlling stake in ITA Airways, the successor company to bankrupt Alitalia, to Delta Air Lines, Air France-KLM and US private equity firm Certares.

The three placed one of two bids in May for the acquisition of ITA Airways. In a statement on Wednesday the Italian Treasury, which controls the business, said this offer was deemed “more respondent to [the government’s] objectives.”

It added that a binding agreement would be reached only if the negotiations fully satisfied the Treasury.

The latest offer comes after Germany’s Lufthansa and Swiss-Italian shipping conglomerate MSC had expressed interest in acquiring a majority stake.

They were deemed the preferred contenders until this week, when Delta Air Lines, Air France-KLM and Certares returned with an improved offer, according to people close to the situation.

Under the private equity-led offer, the Treasury would maintain a 40 per cent stake in ITA Airways, while Certares would own the controlling 60 per cent stake. Delta Air Lines and Air France would be ITA’s commercial partners and could, at a later stage, acquire up to 20 per cent of the company, the people said.

In February, the Treasury was given a mandate by the cabinet to search for a buyer, as Rome sought to accelerate the airline’s privatisation after its bailout in 2021.

In January, ITA boss Alfredo Altavilla told the Financial Times that the potential deal with Lufthansa and MSC was a “very compelling solution” for the carrier, which needs to find an international partner to expand beyond its domestic market.

MSC is the world’s largest container-shipping group and hoped to expand into air cargo through the deal, while Italy is Lufthansa’s main foreign market. The German airline’s chief executive Carsten Spohr in May told Italian newspaper Corriere della Sera that Rome would become the group’s southern hub.

However, people close to the negotiations between the Treasury and the two groups of contenders said that an expansion into the US market proposed by Certares, Delta and Air France-KLM had been deemed more attractive and potentially profitable.

They said the offer would also give the Treasury greater control over the company’s corporate governance to prevent, for example, ITA being sold or broken up, compared with the rival bid from Lufthansa and MSC.

Lufthansa said in a statement that the Treasury’s decision to enter exclusive negotiations with the other bidders “allows for more state influence and does not provide for a full privatisation of ITA”.

Italy is due to hold general elections next month and the rightwing coalition, which is widely favoured by opinion polls, has expressed doubts on the national airline’s sale.

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