Published: Thu, October 12, 2017
Money | By Armando Alvarado

Lufthansa Set To Takeover Air Berlin

Lufthansa Set To Takeover Air Berlin

Air Berlin PLC (AB1.XE) said Thursday it agreed to sell parts of its business to Deutsche Lufthansa AG (LHA.XE) for a total of 210 million euros ($248.5 million).

"We are happy that we have found a strong partner with the Lufthansa Group", said Frank Kebekus, who is representing Air Berlin in the insolvency process.

The Frankfurt-based carrier will sign a contract to buy 81 of Air Berlin's 144 planes and take on 3,000 of its 8,500 staff on Thursday - the last day for bidders Lufthansa and Easyjet to close their deals.

While it conducted the negotiations, Air Berlin's planes were kept in the air by a government loan of 150 million euros. Meanwhile, analysts at Bernstein Research raised their rating on Lufthansa's shares to "outperform" from "market-perform", forecasting the deal with Air Berlin will add between €70m to €90m to annual operating profits at Lufthansa's low-priced subsidiary Eurowings in the medium term.

According to Reuters, Lufthansa will acquire Air Berlin's subsidiaries Niki and LG Walter, as well access to take-off and landing slots at Air Berlin's hubs at Berlin's Tegel airport and at Duesseldorf airport.

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Lufthansa Chief Executive Officer Carsten Spohr delivers his speech in Berlin, Germany, October 12, 2017.

Lufthansa is set to sign a deal to purchase some assets of smaller rival Air Berlin, after the latter went bankrupt.

Analysts at Bernstein Research raised their rating on Lufthansa's shares to "outperform" from "market-perform", saying they expected a deal with Air Berlin to add around 70 to 90 million euros to annual operating profits at Lufthansa's budget unit Eurowings in the medium term.

Air Berlin, Germany's second largest carrier, will cease operating flights this month, capping a turbulent summer for European carriers.

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