Air France wins KLM takeover bid
Air France 'wins KLM takeover bid'
26 September 2003
AMSTERDAM — The Cabinet has reportedly approved Air France's takeover bid of KLM after being allayed of concerns that Schiphol Airport in Amsterdam would suffer at the expense of Charles de Gaulle in Paris.
Cabinet sources said that after meeting with both airlines on Wednesday night the responsible ministers were convinced that Schiphol could maintain its present market position, newspaper De Volkskrant reported.
But Schiphol remains concerned about the takeover, claiming that 15 percent of its flights might disappear to the Paris airport and the Transport Ministry denied on Friday that the government had already approved the Air France deal.
The Dutch State is the largest Schiphol shareholder — maintaining also a 14.1 stake in KLM — and could therefore block the takeover, but the Cabinet has reportedly backed the deal and will discuss the matter later on Friday before making an official decision next week.
Air France is to meet its works council on Monday, further fuelling speculation that an announcement might be imminent, the Financial Times newspaper reported.
And the deal, as it reportedly stands, will see the Dutch State retain control over KLM's fight rights via its so-called golden share, which will be transferred to the new company. This would serve to help protect Schiphol airport from being reduced to a "branch" of Charles de Gaulle.
Negotiations aimed at determining when that golden share control will officially lapse, are continuing.
KLM and Air France will retain their names, but will become two subsidiaries under one holding. KLM will obtain about 16 percent of the new company's shares and the French government will slowly reduce its 54.4 percent stake of Air France.
KLM chief executive will be appointed as the vice-president of the new company and Air France chief Jean Cyril Spinetta will become his immediate boss.
The takeover deal will see KLM enter into the Skyteam alliance, which already includes Italian flag carrier Alitalia and America's Delta Airlines. Skyteam will become the world's largest co-airline operative alliance following the inclusion of KLM.
Meanwhile, Van Wijk discussed the takeover with KLM employee unions on Wednesday night, ensuring workers that no extra job losses would occur as a result of the deal, NOS reported.
KLM is currently going through a restructuring process involving 4,500 job losses, but Van Wijk said the Air France takeover could create jobs, helping to ease union concerns.