Germany's Lufthansa drops bid for Air Berlin's Niki unit

Tammy Harvey
December 14, 2017

Lufthansa cancelled its plan to buy Air Berlin's Austrian subsidiary Niki on Wednesday after the European Commission signalled that it would not approve the merger by December 21.

The UK-based budget carrier said in a statement the acquisition would result in it taking over twenty-five A320 Family aircraft from Air Berlin for use in operating out of the Berlin airfield.

Lufthansa says the Commission sees these concessions as "unsatisfactory and signaled clearly that it could not allow taking over and integrating Niki" into Lufthansa's low-priced subsidiary, Eurowings.

Lufthansa earlier today dropped its bid for Niki after saying the European Commission had indicated it would not now approve the acquisition on competition grounds.

Air Berlin triggered bankruptcy proceedings in August after losing a cash lifeline from its biggest shareholder Etihad Airways.

The EU said it will continue to review Lufthansa's takeover of LGW.

Aside from Lufthansa, Niki attracted bids from International Airlines Group (IAG) and Thomas Cook. Lufthansa and Air Berlin's administrators had also previously warned that would happen if the deal was not approved. Air Berlin in 2004 first bought a stake in Niki, founded a year earlier by Formula One champion Niki Lauda, and in 2010 purchased the majority of the airline. "It was clear from the start that Lufthansa and Air Berlin overlap on a very significant number of routes", the commission said.

Noting that Lufthansa still plans to complete the purchase of LGW, Air Berlin says the purchase price of approximately €18 million will be subject to adjustments upon closing of the transaction and "must be used essentially for a repayment of the priority loan granted by KfW".

Its aircraft were kept aloft by a 150-million-euro emergency loan from the German government while it negotiated the sale of its assets.

The government said it expected only part of the loan could now be repaid and it would take steps to minimise losses for taxpayers. European Union anti-trust officials already granted their unconditional approval for the sale of a share of Air Berlin to Easy Jet on Tuesday.

Other reports by Ligue1talk

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