Lufthansa & ITA Airways Deal On Hold

The planned Lufthansa and ITA Airways deal is on hold due to ongoing disputes over the acquisition’s price point.

Italy’s treasury has put the sale on hold. This follows Lufthansa’s attempt to acquire a minority stake in the Italian carrier that replaced Alitalia.

With a 41% stake, Lufthansa saw ITA Airways as the perfect company to take under its wing. The airline has access to its home country of Italy, a market in which Lufthansa has recently struggled.

Initially trying to push for a 41% stake, a minority one, Lufthansa executives haven’t been afraid to state that with time. If the acquisition is a success, they will move to try to take a majority in the airline and fully integrate it within the Lufthansa Group.

However, according to sources, including Reuters, the Italian treasury has now stated that it does not want to undersell ITA Airways.

The hold-up reportedly involves Lufthansa’s plans to increase its stake to a majority should the acquisition of a minority go according to plan.

Specifically, the concerns relate to the eventual price that’ll be paid to grow the 41% stake to a majority and give the German flag carrier full control of the Italian airline.

Lufthansa says it’s keen to work with Italy and ITA Airways to resolve the matter to ensure that the takeover ambitions can continue. It will propose various remedies to try to get the minority part of the deal over the line, at the very least.

Disagreements such as these and/or concerns over a price point occurring at the final hour are not uncommon and can stem from various factors such as trying to get a fair deal, pushback at the last moment over fears of what could occur, and much more.

For the Lufthansa and ITA deal, the EU obtained formal approval at the beginning of July 2024 to integrate the Italian company into the broader Group.

Once all parties, however, can agree on the financial side of the deal and proceed, Lufthansa will have greater access to Rome and, therefore, the opportunity to better service markets across Africa and Latin America.

Under the wing of Lufthansa Group, analysts have also forecasted that ITA Airways will have a greater ability to be sustainable and succeed in the highly competitive European market. Furthermore, this market faces colossal competition from the likes of the International Airlines Group and Air France-KLM Group.