EU clears Lufthansa's Austrian Airlines takeover

German airline Deutsche Lufthansa AG said Friday the European Commission has approved its takeover of Austrian Airlines Group, allowing it start integrating the company in September.

Cologne-based Lufthansa is taking over about 42 percent of the shares of Austrian Airlines owned by the government for about euro336,000 ($480,000), according to the European Commission.

The commission also approved a euro500 million government restructuring program, which Lufthansa has said in the past would be necessary to reduce Austrian's debt.

Lufthansa also made a euro166 million offer for the free floating Austrian shares and has more than the necessary 75 percent for the takeover, Lufthansa said.

Lufthansa said it would extend the Austrian share purchase by about another week, but then envisions a squeeze out of the remaining minority shareholders.

The EU made its decision based on the condition that Lufthansa and Austrian give up some of their flights on the routes between Vienna and Frankfurt, Munich, Stuttgart, Cologne and Brussels for competition reasons.

Lufthansa has been busy consolidating the airline industry, and is now Europe's largest airline by sales ahead of AirFrance-KLM.

In June, the commission approved Lufthansa's acquisition of a stake in Brussels Airlines. Last year, Lufthansa bought 80 percent of BMI British Midland - giving it a much greater presence at London's Heathrow Airport.

In 2008, the airlines of the Lufthansa Group carried 70.5 million passengers, flying to 242 destinations with a fleet of about 550 aircraft.

In 2008, 10.7 million passengers flew with Austrian Airlines to 120 different destinations. Austrian Airlines currently operates a fleet of 91 aircraft.

Shares of Lufthansa closed 1.6 percent higher at euro11.31 in Frankfurt.

---

On the Net:

http://www.lufthansa.com