ANDY NATIVI /GENOA
KLM has confirmed that it has begun talks with the Italian Government over a possible merger with Alitalia.
The informal discussions are understood to centre on the financial and operational terms of a merger, plus two obstacles that derailed earlier negotiations - the privatisation of the Italian carrier and the full exploitation of the new Milan Malpensa Airport.
On the Italian side the talks are being led by the Treasury, which took control of a 53% stake in Alitalia from holding company IRI last year. It is thought to have sketched out two main options - the favoured one being the privatisation of Alitalia combined with a "friendly" takeover of KLM.
Italian press reports say the operation would seek to address the difference in value between the two airlines - Alitalia's market capitalisation was twice that of KLM when merger talks collapsed last April - by placing a 30-35% premium on KLM shares, to be paid for by the issue of new Alitalia shares.
The move would mark a climbdown by Rome, which had previously refused to "overvalue" KLM. The resultant company would feature an "Italian" shell above a merged airline, with the Italian and Dutch Governments each having a 15% stake.
Source: Flight International
