Air France-KLM and Delta eye bid for Virgin Atlantic
Reports have emerged that Air France-KLM and Delta Air Lines are working together to examine the potential of launching a bid for Virgin Atlantic. The two Skyteam carriers have reportedly hired Goldman Sachs to advise on a bid.
- Air France-KLM and Delta Air Lines are considering a joint bid for Virgin Atlantic, with Goldman Sachs hired to advise on the potential acquisition.
- Virgin Atlantic has not directly commented on the bid but acknowledged the interest in the airline.
- Virgin Atlantic founder Sir Richard Branson previously expressed the need for the airline to join a global alliance due to increasing competition.
- Branson stated that he may consider selling down the Virgin Group's stake in Virgin Atlantic to ensure its survival.
- Singapore Airlines currently holds a 49% stake in Virgin Atlantic, but it is unclear if they will retain their holding.
- Shares in American markets were generally lower, except for Hawaiian Airlines, which experienced a gain.
Virgin Atlantic did not comment directly on any bid from the carriers, but stated it was not surprised that there was interest in it.
In Jan-2011, Virgin Atlantic Airways founder and President Sir Richard Branson stated the carrier plans to join a global alliance with an agreement expected to be reached within 12 months. He said has was "reluctantly looking" at selling down the Virgin Group's stake in Virgin Atlantic, to ensure it survives the growing competition on many key routes. The carrier has hired Deutsche Bank to explore its options after British Airways gained approval to increase trans-Atlantic cooperation with American Airlines.
Sir Richard however added that it was "unlikely" than any agreement would end his control of the airline. Branson's Virgin Group owns 51% of Virgin Atlantic while Singapore Airlines has a 49% stake. Sir Richard did not say whether he expected Singapore Airlines to retain its holding. Singapore Airlines is a member of Star Alliance, which also includes Lufthansa, US Airways, United Airlines and bmi.
Shares in American markets were generally lower, with Republic Airways dipping 2.6%. The major exception was Hawaiian Airlines which gained 3.1%.
Selected AAD daily share price movements (% change): 18-Feb-2011
