No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Franco-Dutch carrier Air France-KLM announced on Friday that it is to increase its shareholding in Scandinavian Airlines System (SAS) to a majority stake as it aims to expand further into the Scandinavian market.
The company, which already holds a 19.9% share of the Sweden-based airline and benefits from a commercial cooperation between SAS, Air France and KLM, is to increase its holding to 60.5%.
Since last summer, Air France-KLM extended codeshare and interline agreements with SAS, bolstered by the latter joining the SkyTeam alliance.
This new investment follows a "significant improvement" of SAS's financial and operational performance, along with the success of the cooperation agreements, Air France-KLM said.
SAS will become a subsidiary of Air France-KLM to "fully unlock their synergy potential, confirm the group's expansion in the Scandinavian market, and create additional potential for value delivery to shareholders", it said.
The deal, which includes taking over the stakes held by Castlelake and Lind Invest, was for an undisclosed sum, with the value of the potential investment to be "determined at closing, based on SAS's latest financial performance", the Paris-listed group said.
"Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline's potential will continue to grow through deeper integration within the Air France-KLM Group," said chief executive Benjamin Smith.
Air France-KLM shares were up just 0.1% at 9.92 by 1515 in Paris.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.