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Lufthansa concludes BMI takeover

Thursday 13 Nov 2008 7:56am

Lufthansa, Germany's national airline, has announced that it has finalised a deal to takeover bmi. Under the £314 million agreement, he bmi's chairman Sir Michael Bishop will relinquish his majority stake in the airline while Lufthansa will increase its controlling stake to 80 per cent. The takeover was agreed as bmi continues to struggle with increasingly tough economic conditions. It is also expected that Lufthansa will launch a deal to obtain the remaining 20 per cent share in bmi from another struggling airline, Scandinavian Airlines (SAS). This is in spite of the German airline announcing a 75 per cent fall in its profits for the last financial quarter. Virgin Atlantic has also declared its intention to form a significant new partnership with the Lufthansa group of airlines. If this partnership agreement was to go through, it would create Europe's biggest carrier. Virgin Atlantic's chief executive Steve Ridgway commented: 'Everyone has speculated that it would make sense for Virgin Atlantic and BMI to combine their long-haul and short-haul networks. 'I am sure that Lufthansa realises this could be a really good example of the right industry consolidation. ' Bmi currently holds 12 per cent of all departure slots at London's Heathrow Airport, a share that has made it an attractive acquisition for several larger airlines in recent years.

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