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Lufthansa to buy Austrian Airlines

Text by AFP

Latest update : 2008-11-13

Europe's top airline, Lufthansa, is to buy rival Austrian Airlines after a long battle with Air France-KLM and a Russian air carrier, according to the main shareholder of the Austrian company.

Austrian Airlines will be sold to German carrier Lufthansa, the Austrian state holding company OeIAG, which has a 41.6-percent stake in the loss-making airline, announced Thursday evening.
  
"As of now, OeIAG will only hold concluding talks with Lufthansa," it said in a statement after a meeting of its privatisation committee.
  
Rival bidders "(Russia's) S7 and Air France-KLM are no longer in the bidding process," it added.
  
OeIAG explained that S7 had failed to submit documents that were in conformity with the EU bidding rules, while Air France-KLM had not made an offer within the allotted time.
  
The two companies have been informed of the holding's decision, it added.
  
OeIAG director Peter Michaelis said the sale price and details in the deal with Lufthansa would still be finalised in the coming weeks, but added that he expected an agreement within a month, which would allow the holding company's directors to examine the decision at their next meeting on December 5.
  
Among the issues to discuss are Lufthansa's reported demands that the government take over 500 million euros (638 million dollars) of AUA's debt of more than a billion euros.
  
Lufthansa is offering only a nominal price for OeIAG's 41.6-percent stake -- just 0.01 euro per share or 360,000 euros (445,200 dollars) in all, according to media reports.
  
On Thursday evening, Lufthansa refused to comment on OeIAG's decision.
  
At Thursday's close, AUA shares were down 0.38 percent to 2.63 euros on the Vienna stock exchange.

Date created : 2008-11-13

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