Air France-KLM plans to extend its stake in Scandinavian airline SAS to 60.5%, the most recent step in direction of consolidating Europe's fragmented airline sector as carriers search to strengthen their place towards rivals.
The Franco-Dutch airline group mentioned on Friday it supposed to extend its stake from 19.9% presently by buying the stakes held by high shareholders Castlelake and Lind Make investments.
The acquisition, topic to regulatory clearances, is predicted to shut within the second half of 2026, Air France-KLM mentioned.
The worth of the funding could be decided at closing, based mostly on SAS's newest monetary efficiency, together with core earnings and internet debt, the corporate mentioned. It declined to present particulars on these metrics.
Air France-KLM expects to generate “three-digit million” euros in synergies from elevating its SAS stake, finance chief Steven Zaat informed analysts on a name.
Zaat mentioned the deal could be funded from money or a “plain vanilla bond” and wouldn't impression the drive to cut back the group's hybrid debt. “We now have ample room for it,” he mentioned.
SAS welcomed Air France-KLM's announcement.
“European consolidation needed to occur additional, and we're very blissful to be a part of that,” SAS CEO Anko van der Werff informed Danish broadcaster TV2.
“Within the present setup the place Air France-KLM is a 19.9% shareholder, they're nonetheless a competitor,” he mentioned. “With the brand new stake, going above 50%, we will actually faucet into all of these synergies and supply these advantages to clients.”
SAS mentioned it will proceed to spend money on its fleet and community.
In 2023, Air France-KLM mentioned it will make investments about $144.5 million for its preliminary SAS stake, boosting its presence in Sweden, Denmark and Norway with the choice to grow to be a controlling shareholder after a minimal of two years, topic to circumstances.
SAS exited from Chapter 11 chapter safety in August 2024.
The 2 carriers have already had a industrial cooperation since summer season 2024. Management of SAS would enable Air France-KLM to develop within the Scandinavian market and create extra worth for shareholders, Air France-KLM mentioned in a press release.
“Following their profitable restructuring, SAS has delivered spectacular efficiency, and we're assured that the airline's potential will proceed to develop by deeper integration inside the Air France-KLM Group,” mentioned Air France-KLM CEO Ben Smith.
The deal comes as executives search extra consolidation in Europe's fragmented airline trade, which they are saying is required to compete with U.S. and Center Jap rivals.
SAS has 138 plane in service and carried greater than 25 million passengers final 12 months, producing revenues of 4.1 billion euros ($4.8 billion).
Air France-KLM group would have a majority of seats on the board of administrators, whereas the Danish state will maintain its 26.4% stake in SAS and its seats on the board.
