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Air France Buys Alitalia in Cut-Rate Deal

Struggling Italian carrier sells for 81% below market value

By Sam Biddle, Newser Staff

Posted Mar 17, 2008 3:07 AM CDT

(Newser) – Embattled Italian airline Alitalia has accepted a severely discounted buyout from Air France, the BBC reports. The $1.17-billion deal, which includes both the airline and its debt, sees Air France take over the Italian carrier at 81% below company's current share price. Alitalia has been in the red for the past five years, and failed to find a buyer at auction last year.

The agreement is still pending the approval of the Italian government—which holds 49.9% of Alitalia’s stock—as well as the blessing of European regulators. Air France plans to inject $1 billion in capital into the ailing Alitalia through an offering of new shares, hoping to curb losses for the company. The airline is currently hemorrhaging $1.59 million a day.

Air France-KLM chief executive Jean-Cyril Spinetta arrives with former Alitalia CEO Francesco Mengozzi, left, for a meeting with UGL union leaders in Rome, Wednesday, Jan. 9, 2008, after talks with Italian...

An Air France plane, left, and an Alitalia plane, right, are seen at Charles de Gaulle airport, outside Paris, Sunday, March 16, 2008. (AP Photo)

Alitalia and Air France airplanes are seen on the tamrac of Rome's Fiumicino international airport in this Dec. 18, 2007 file photo.

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Air France Buys Alitalia in Cut-Rate Deal

Struggling Italian carrier sells for 81% below market value

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Alitalia Gets Reprieve as Pilots Back Takeover Deal

Unions support gov't-backed plan to dodge collapse

Italy's National Airline Could Shut Down Within Week

Balky unions have hampered efforts to find buyer for bankrupt Alitalia

Italians Impatient With Alitalia Rescue Efforts

Berlusconi's pleas for patriotism fall on deaf ears

Air France-KLM Pulls Offer for Alitalia

Berlusconi scrambles as bankruptcy looms for Italian carrier

Delta-Northwest Merger Close to Takeoff

Boards meet tomorrow to vote on plans that would create world's largest airline

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Air France Buys Alitalia in Cut-Rate Deal

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OTHER STORIES ON OUR RADAR

airline industry • Italy • buyout • Alitalia • Air France KLM Group

MOST POPULAR STORIES

[ By Views ]

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More Newser Stories

Alitalia Gets Reprieve as Pilots Back Takeover Deal

Unions support gov't-backed plan to dodge collapse

Italy's National Airline Could Shut Down Within Week

Balky unions have hampered efforts to find buyer for bankrupt Alitalia

Italians Impatient With Alitalia Rescue Efforts

Berlusconi's pleas for patriotism fall on deaf ears

Air France-KLM Pulls Offer for Alitalia

Berlusconi scrambles as bankruptcy looms for Italian carrier

Delta-Northwest Merger Close to Takeoff

Boards meet tomorrow to vote on plans that would create world's largest airline

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Newser By Users

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