Germany’s biggest airline Lufthansa will finalise a planned joint venture with Air China at a ceremony in Beijing later this month, rounding off over two years of negotiations, a person involved in the deal said.
Lufthansa chief executive Carsten Spohr will travel to the Chinese capital for the Sept. 20 event with the country’s flagship carrier, said the source, who did not want to be identified before the deal was formally announced.
The firm signed an agreement in principle in July 2014 to work towards a joint venture allowing them to share revenue on certain routes by selling tickets for each others’ flights. Such arrangements allow airlines to work together on routes and pricing while sidestepping foreign ownership rules that keep them from merging.
Lufthansa declined to comment. An Air China spokeswoman did not respond to requests for comment.
When it signed the accord in principle in July 2014 the German carrier said it hoped that the deal would improve its position in China, the world’s fastest growing aviation market.
Spohr warned at the time that it could take until 2016 before the joint venture was fully up and running due to the time needed for antitrust approval. (Reporting by Brenda Goh and Victoria Bryan; Editing by Kenneth Maxwell and Adrian Croft).
Recent Articles on M&A
Source: Reuters.com