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Air France withdraws Alitalia takeover bid

Air France withdraws Alitalia takeover bid
AFP
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First Published: Tue, Apr 22 2008. 09 58 AM IST
Updated: Tue, Apr 22 2008. 09 58 AM IST
Paris: Air France-KLM said it was formally withdrawing its takeover offer for cash-strapped Alitalia after negotiations between the two sides collapsed earlier this month.
The airline Monday said in a statement it had “indicated to Alitalia that the contractual arrangements announced on 14 March with a view to launching a public exchange offer on Alitalia were no longer valid”.
It said it made the move after a request by the Italian airline “to clarify the legal situation following the interruption of the negotiation between Air France-KLM and Alitalia”.
Italy’s government will hold a cabinet meeting within the next 48 hours to determine how to respond to Air France-KLM’s decision, with Alitalia near bankruptcy, ANSA news agency reported.
Talks between the two sides broke down on 2 April after the Franco-Dutch company, whose offer initially entailed the loss of 2,100 jobs, rejected counter-proposals from Alitalia unions.
But five days later Air France-KLM said its offer was the only one that would allow the Italian flag carrier to return to profitable growth quickly and that the company’s future now depended solely on its workforce and unions.
Both the outgoing Italian government and unions at Alitalia had also signalled they wanted Air France-KLM to return to the negotiating table.
On Friday, Russian airline Aeroflot was floated as a potential partner for Alitalia by prime minister-elect Silvio Berlusconi following a meeting with President Vladimir Putin.
The Italian leader invited Aeroflot -- which withdrew interest in acquiring Rome’s 49.9% stake in November -- to join an enlarged international conglomerate at some later date.
Berlusconi and the outgoing government of Romano prodi have said they would try to agree a common approach in order to save Alitalia from bankruptcy.
According to press reports last week, the government may lend Alitalia 100 to 150 million euros ($160-$238 million) to give it more time to find a partner.
Alitalia is losing about one million euros a day and had some 170 million euros in the bank as of the end of March.
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First Published: Tue, Apr 22 2008. 09 58 AM IST
More Topics: Air France | Alitalia | Corporate News | MAs |