AMSTERDAM — The Air France takeover of KLM will definitely go ahead following the announcement on Tuesday that 89.22 percent of the Dutch airline’s shareholders have offered their holdings to the French carrier.

KLM shareholders had until Monday night to offer their shares and despite the large majority offering their shares, Air France has extended its all-share offer to 21 May in a deal which will create the largest European airline and the third-biggest carrier in the world in terms of sales.

The takeover will see the issue 51.5 million new Air France shares as the French government reduces its stake in Air France from 54 percent to 44.7 percent of the Air France-KLM holding. It represents a de facto privatisation of the French airline.

KLM will take on a minor share in the new company, taking control of 19 percent of the new holding, while Air France will claim 37 percent.

Air France chief and the incoming chairman of Air-France-KLM, Jean Cyril Spinetta, expects that the French State will reduce its stake in the new company by 50 percent in coming months, depending on market circumstances.

The Dutch government’s stake, which currently holds 14.1 percent of KLM, will decrease its share proportionately.

The terms of the exchange offer, valid from 5 April to 3 May, had stated that Air France needed to buy more than 70 percent of outstanding KLM shares, in a deal valued at about EUR 850 million, a French AFP report said.

Investors will be able to start trading in the shares of the new holding company on the Amsterdam and Paris stock exchanges from Wednesday, Dutch public news service NOS reported.

KLM has been searching since the 1990s for a suitable fusion. KLM chief Leo van Wijk, who will become the new holding company’s deputy chairman, has said an independent survival of KLM would have been impossible.

Previous talks with British Airways broke down and discussions with Italian airline Alitalia also stranded. The intended Air France takeover was announced in September 2003.

Critics of the deal fear that Schiphol Airport in Amsterdam will play second fiddle to Charles de Gaulle in Paris, but both Spinetta and Wijk have repeatedly dismissed these concerns.

[Copyright Expatica News 2004]

Subject: Dutch news + KLM + Air France