Wed, Jan 23, 2008
German Airline Now Holds 19 Percent Stake In LCC
JetBlue Airways and Deutsche Lufthansa AG recently completed
their previously-announced stock purchase agreement transaction --
giving the German airline a 19-percent stake in the US low-cost
carrier.
As ANN reported, in December
2007 Lufthansa announced it would pay $300 million for a 19-percent
stake in JetBlue, marking the first time Lufthansa had made a move
into the US airline industry. The deal gave JetBlue a welcome
infusion of cash, and gives Lufthansa control over a potential
takeover down the line.
In a release to ANN Tuesday, JetBlue said both sides would now
"begin exploring innovative commercial arrangements designed to
benefit both airlines and their customers" -- a decidedly
euphemistic statement that could be taken in a variety of ways.
Lufthansa acquired roughly 42 million newly-issued shares in
JetBlue, for $7.27 per share. The deal will also give Lufthansa a
seat on JetBlue's board of directors, and lays the groundwork for
what Lufthansa termed "an operation cooperation" in December.
"We are very pleased to become an
investor in JetBlue," Lufthansa CEO Wolfgang Mayrhuber said last
month. "Our investment reflects the confidence we have in JetBlue's
quality, growth potential and management team. This investment
presents Lufthansa with a compelling opportunity to invest in the
US point-to-point carrier market as the industry continues to
evolve. The transaction links two airlines with international
reputations for quality, innovation and a service culture."
Lufthansa's stake in JetBlue falls under the 25 percent level of
foreign ownership where the Department of Transportation gets
nervous, though it's possible the carrier would try to add to its
stake down the line, and test the DOT's restrictions.
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