Finnair and flybe acquire FCA, to set up Flybe Nordic AB
Finnair and flybe announced (01-Jul-2011) they will jointly acquire Finnish Commuter Airlines (FCA), a Finnish regional carrier owned by Finncomm Oy. The companies will create a new joint venture called Flybe Nordic AB, in which flybe will take a 60% stake and Finnair 40%. Flybe Nordic AB's board will comprise three representatives from flybe, and two from Finnair. Flybe Nordic AB will acquire FCA for a total consideration of EUR25 million plus net cash in the acquired business at completion, with flybe paying EUR12 million in cash and Finnair EUR13 million, also in cash. FCA will continue operating FCA's existing domestic routes under the flybe brand. flybe plans to take over the day-to-day operation and management of the airline from 01-Aug-2011. Finnair will acquire the FCA fleet of nine ATR 72 aircraft at market price and lease them to FCA, owned by Flybe Nordic. In addition, Finnair has committed to purchase the three Finncomm ordered, high-demand ATR 72s, to be delivered autumn 2011 and autumn 2012. The aircraft will be leased directly to FCA at a market price. The acquisition is subject to approval of the relevant competition authorities. [more]
Finnair: "The joint venture with flybe and the acquisition of FCA are 100% in line with the Finnair strategy. Our target is to partner with the industry best to create added value to our customers and shareholders. FCA's current network is a tremendous asset when we continue to further develop our regional network. We believe that flybe's point-to-point experience and their unique business model will complement Finnair's international network competencies in an optimal manner and enables us to build a true Nordic regional champion." Mika Vehviläinen, CEO. Source: Finnair, 01-Jul-2011.
flybe: "Partnerships and acquisitions are at the core of our European growth strategy, which is to export our strong and proven UK business model to become Europe's leading and most profitable regional airline. Selective acquisitions offer the fastest and most visible route to profitability in the regional airline sector, whilst partnership with Finnair allows us to provide feeder traffic services under an agreed contract, reducing new route risk. This deal not only meets our stated strategic objectives but is a perfect example of the successful execution of our strategy. FCA is a great base to build on, with excellent routes and a talented team of employees. It also has compelling growth opportunities. Everyone at flybe is looking forward to working with Finnair and FCA, to drive forward our strategy of creating the largest and most profitable regional airline in the Nordic and Baltic States." Jim French, Chairman and CEO. Source: StockMarketWire.com, 02-Jul-2011.