Or should we say LH about to take over Swiss ?? :diablo:
ZURICH (Dow Jones)–Deutsche Lufthansa (LHA.XE) Sunday said it is in talks with Swiss International Air Lines (SWIN.EB) to take over the struggling Swiss carrier.
“If the required approvals are obtained, Lufthansa will submit an offer to the free float shareholders based on the average share price of the recent weeks,” both companies said in separate press statements, declining to specify a takeover price or to detail a time horizon for the deal.
Officials from Lufthansa and Swiss International Air Lines and the core shareholders of the Swiss airline will meet Monday to discuss the deal.
The takeover announcement ends almost two years of speculation that the two airlines intend to link up their operations. In 2003, a first attempt to integrate Swiss International Air Lines into Lufthansa failed because of political resistance in Switzerland.
Both companies said they have jointly developed a business model, which aims to combine strengths of both airlines.
Under the takeover plan, the Swiss carrier should retain its “independence … to the extent possible”, Swiss International Air Lines said. “The cornerstones include maintaining the air traffic infrastructure within Switzerland as well as the brand name Swiss”, the company added.
A potential takeover, however, still needs the approval of the Lufthansa supervisory board as well as the relevant Swiss corporate bodies and Swiss International Air Lines’ core shareholders.
These include the Swiss government with a 20.4%, followed by UBS AG (UBS) with 10.4%, Credit Suisse Group with 10%.
Chances, however, that a takeover will succeed this time are high.
Lufthansa aims to extend its current global network and Swiss International Air Lines needs to find a strong partner to survive, a fact that most politicians in Switzerland have acknowledged.
The Swiss government also recently said it is supporting a potential takeover by Lufthansa. The fact that Swiss International Air Lines will be able to continue to fly from its hub in Zurich is also likely to soften political opposition in Switzerland.
Swiss International Air Lines has been unprofitable ever since it was created in 2002 out of defunct Swissair and regional Swiss carrier Crossair with the help of state money. Its cumulative net loss is nearly CHF2 billion over the past three years, despite huge cuts to its fleet and staff base.
Besides a small home market, high oil prices, and heightened competition from low-cost carriers in Europe, Swiss’s lack of a strong partner and its failure to enter one of the global airline alliances were mostly blamed for its poor performance.
In a first step, Lufthansa will offer the free float shareholders a takeover bid and then submit the offer to Swiss International Air Lines’ other shareholders, if they approve of the deal.
Around 14% of Swiss International Air Lines shares are traded freely while the rest of the shares are held by the government, the cantons and several institutional shareholders, including UBS and Credit Suisse. These shareholders have signed a lock-up agreement not to sell their shares.
Swiss International’s current market capitalization stands at CHF545 million, but a potential takeover price could be lower since Swiss International shares rose 19% last Friday after the takeover speculation resurfaced.
Both companies will discuss the progress of the negotiations in due time, they said.
Company Web Site: http://www.swiss.com
-By Goran Mijuk, Dow Jones Newswires; +41 43 443 80 47; goran.mijuk@ dowjones.com
By: tenthije - 14th March 2005 at 19:03
This means another member to join the Star Alliance…
Considering the number of airlines from German speaking countries, perhaps they should rename it “Der Stern Allianz”.
By: tenthije - 14th March 2005 at 19:03
This means another member to join the Star Alliance…
Considering the number of airlines from German speaking countries, perhaps they should rename it “Der Stern Allianz”.
By: Sonnenflieger - 14th March 2005 at 18:29
This means another member to join the Star Alliance…
By: Sonnenflieger - 14th March 2005 at 18:29
This means another member to join the Star Alliance…
By: tenthije - 14th March 2005 at 17:10
You still see Air Dolimiti, when the rest of the regional LH fleet are flying around in LH Regional colours.
Isn’t Air Dolomiti an independant airline, whereas the other LH Regionals are (part-) owned by LH?
By: tenthije - 14th March 2005 at 17:10
You still see Air Dolimiti, when the rest of the regional LH fleet are flying around in LH Regional colours.
Isn’t Air Dolomiti an independant airline, whereas the other LH Regionals are (part-) owned by LH?
By: Bhoy - 14th March 2005 at 17:04
Since January, Swiss have already used a Privatair BBJ2 on the ZRH-EWR run.
yes, KLM has a strong identity, but does Swiss?
By: Bhoy - 14th March 2005 at 17:04
Since January, Swiss have already used a Privatair BBJ2 on the ZRH-EWR run.
yes, KLM has a strong identity, but does Swiss?
By: tenthije - 14th March 2005 at 17:02
Not all, I think they will continue to operate intercontinetal flights from ZRH using the Swiss cooperate identity. At least those making money.
Well, that leaves just 2 or 3 long hauls. Most of Swiss’ long haul is not profitable. But perhaps a A319CJ styl operation could be more succesful? Similar to LH/Privatair flying from DUS to New York and Chicago.
Air France took over KLM, and KLM still survives
There is a specific clause in the merger (take-over) contract that states that KLM is to retain its identity for at least five years. After those five years it remains to be seen what will happen.
Personally I am not too worried as KLM is too strong a brand to just kill of. It would not be in AF’ best advantage. However, changes are likely… perhaps even loosing some of the blue?
I know a lot of people are worried though that AF will kill of KLM and make it something like AF Nord. (Jwenting for instance) We’ll see.
By: tenthije - 14th March 2005 at 17:02
Not all, I think they will continue to operate intercontinetal flights from ZRH using the Swiss cooperate identity. At least those making money.
Well, that leaves just 2 or 3 long hauls. Most of Swiss’ long haul is not profitable. But perhaps a A319CJ styl operation could be more succesful? Similar to LH/Privatair flying from DUS to New York and Chicago.
Air France took over KLM, and KLM still survives
There is a specific clause in the merger (take-over) contract that states that KLM is to retain its identity for at least five years. After those five years it remains to be seen what will happen.
Personally I am not too worried as KLM is too strong a brand to just kill of. It would not be in AF’ best advantage. However, changes are likely… perhaps even loosing some of the blue?
I know a lot of people are worried though that AF will kill of KLM and make it something like AF Nord. (Jwenting for instance) We’ll see.
By: Bhoy - 14th March 2005 at 16:57
yes, but KLM had profitable routes. Swiss has hee haw.
By: Bhoy - 14th March 2005 at 16:57
yes, but KLM had profitable routes. Swiss has hee haw.
By: TRIDENT MAN - 14th March 2005 at 16:43
Air France took over KLM, and KLM still survives
By: TRIDENT MAN - 14th March 2005 at 16:43
Air France took over KLM, and KLM still survives
By: seahawk - 14th March 2005 at 16:42
Not all, I think they will continue to operate intercontinetal flights from ZRH using the Swiss cooperate identity. At least those making money.
The inter european flights will probably be taken over by Germanwings in a short time, apart from the most profitable routes (if there are any). In the end I imagine they will try to get much of the traffic to their hubs in MUC and FRA.
By: seahawk - 14th March 2005 at 16:42
Not all, I think they will continue to operate intercontinetal flights from ZRH using the Swiss cooperate identity. At least those making money.
The inter european flights will probably be taken over by Germanwings in a short time, apart from the most profitable routes (if there are any). In the end I imagine they will try to get much of the traffic to their hubs in MUC and FRA.
By: Bmused55 - 14th March 2005 at 16:27
Swiss will keeps its independance…. yeah right!
All those red tails with white crosses will slowly change to dark blue with yellow cranes.
By: Bmused55 - 14th March 2005 at 16:27
Swiss will keeps its independance…. yeah right!
All those red tails with white crosses will slowly change to dark blue with yellow cranes.
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March 14, 2005 at 4:16 pm