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May 17, 2008 12:41:42 AM CDT

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Air France-KLM Pulls Offer for Alitalia  

Posted Apr 22, 08 6:37 AM CDT in Business    Most Covered

(newser) – Air France-KLM has withdrawn its offer to buy Alitalia, leaving the cash-poor Italian carrier with few options. In a tersely worded statement, the world's largest airline said its Alitalia overture—which had been opposed by Alitalia's unions—was "no longer valid." With no suitors forthcoming and cash reserves dwindling—the airline loses $1.6 million a day—Alitalia may be forced to declare bankruptcy, writes the Wall Street Journal.

The withdrawal of Air France's offer calls the bluff of Prime Minister-elect Silvio Berlusconi, who had threatened to block the sale during the Italian election campaign. The collapse of Italy's national carrier would be a political nightmare for Berlusconi's center-right political alliance. About 18,000 people work for the airline, of which the government owns a 49.9% stake.

Source Wall Street Journal

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Air France-KLM Pulls Offer for Alitalia
Air France-KLM has abandoned an offer that might have saved Alitalia, the struggling Italian airline.   (AP Photo/Plinio Lepri, File)
Air France-KLM Pulls Offer for Alitalia
Prime minister-elect Silvio Berlusconi. Air France-KLM has abandoned an offer that might have saved Alitalia, the struggling Italian airline.   (AP Photo/Gregorio Borgia)
Air France-KLM Pulls Offer for Alitalia
Air France-KLM has abandoned an offer that might have saved Alitalia, the struggling Italian airline.   (AP Photo/Air France, HO)
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Italy  • mergers and acquisitions  • airline industry  • Silvio Berlusconi  • Air France KLM Group  • Alitalia  • Air France


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