FRANCE: AIR FRANCE AND KLM UNVEIL PLANS TO CREATE EUROPE'S LEADING AIRLINE, LATEST.

Record ID: 646572

  • Title: FRANCE: AIR FRANCE AND KLM UNVEIL PLANS TO CREATE EUROPE'S LEADING AIRLINE, LATEST.
  • Date: 1st October 2003
  • Summary: (EU) CHARLES DE GAULLE AIRPORT, ROISSY, FRANCE (SEPTEMBER 30, 2003) (REUTERS - ACCESS ALL) 1. CU: AIR FRANCE AND KLM LOGO 0.05 2. GV: AIR FRANCE CHAIRMAN JEAN CYRIL SPINETTA AND LEO M. VAN WIJK, KLM CHAIRMAN ARRIVING IN CONFERENCE ROOM 0.08 3. MV: SPINETTA AND VAN WIJK HOLDING MODELS OF AIR FRANCE AND KLM PLANES 0.18 4. GV/PAN: REPORTERS AND PAN TO SPINETTA AND VAN WIJK 0.21 5. LV: CONFERENCE ROOM 0.24 6. MV: (SOUNDBITE) (French) AIR FRANCE CHAIRMAN JEAN-CYRIL SPINETTA SAYING: "We've signed this morning a letter of intention between our two companies and it is an important day for Air France and KLM and I think that this agreement shows a great evolution in our industry, in our job and in the air transport. We came, Leo and I, our teams to the same conclusion: the connection between our two companies is a new chance for both of us on an economic point of view and regarding our stakes in the near future." (3 SHOTS) 1.22 7. MV: (SOUNDBITE) (English) KLM CHAIRMAN LEO M. VAN WIJK SAYING: "We have the same strategic objective for this transaction. The main reason for creating this transaction is basically three falls as you can see: changing the European environment, the complementarity of our two companies and a possibility to extract significant synergies from this transaction." 1.57 8. MV: (SOUNDBITE) (French) SPINETTA SAYING: "The agreement we've signed, is creating for this new entity, for this new group a leading position in Europe and worldwide. This leading position will allow us to have a competitive advantage on our competitors in Europe and on the big international markets." 2.21 9. LV/PAN: REPORTERS, SPINETTA AND VAN WIJK 2.30 10. GV: AIR FRANCE PLANE ON TARMAC (GOOD SHOTS) (2 SHOTS) 2.51 11. GV/GV/PAN: KLM PLANE ON TARMAC (2 SHOTS) 3.07 12. GV: AIR FRANCE PLANE TAKING OFF 3.13 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 16th October 2003 13:00
  • Keywords:
  • Location: CHARLES DE GAULLE AIRPORT, ROISSY, FRANCE
  • Country: France
  • Reuters ID: LVA7X5TE12VA4SQBT2QQBKX24FG8
  • Story Text: Air France and KLM have unveiled plans to create
    Europe's leading airline in an all-share deal that would
    see the French carrier acquire its smaller Dutch rival for
    784 million euros.



    Air France and KLM, Europe's second and
    fourth-ranked carriers, have been in alliance talks for
    over a year and held board meetings Monday evening that
    approved the outlines of a deal which represents the first
    cross-border merger of major
    European airlines.

    Under the terms of the transaction, Air France would
    offer 11 of its own shares plus 10 Air France warrants for
    every 10 KLM shares held. Three warrants give the owner the
    right to buy two Air France shares at 20 euros each after a
    one-and-a-half
    year period.

    The deal values the share capital of KLM at 784 million
    euros and represents a 40 percent premium over KLMs closing
    share price of September 29.

    Current KLM shareholders would own 19 percent of the
    enlarged group, while the French state would see its stake
    fall to 44 percent from its current 54 percent. Air France
    shareholders would own the remaining 37 percent.

    During the press conference, Air France Chairman
    Jean-Cyril Spinetta told reporters, "We've signed this
    morning a letter of intention between our two companies and
    it is an important day for Air France and KLM and I think
    that this agreement shows a great evolution in our
    industry, in our job and in the air transport.

    We came, Leo and I, our teams to the same conclusion:
    the connection between our two companies is a new chance
    for both of us on an economic point of view and regarding
    our stakes in the near future."
    KLM Chairman Leo M. Van Wijk added, "We have the same
    strategic objective for this transaction. The main reason
    for creating this transaction is basically three falls as
    you can see: changing the European environment, the
    complementarity of our two companies and a possibility to
    extract significant synergies from this transaction."
    Jean-Cyril Spinetta also said that the new entity will
    have a leading position not only in Europe but worldwide.

    The airlines said they expected to sign the agreement
    within the next few weeks and launch the exchange offer in
    the first half of March 2004.

    If completed, the KLM/Air France combination would take
    over from British Airways as Europe's largest airline in
    terms of traffic and become the worlds third-largest behind
    American Airlines and Delta.

    By 0745 GMT, shares in KLM had rocketed up 16.6 percent
    to 13.95 euros. Air France stock stood 3.6 percent lower at
    13.2 euros, while Alitalia shares were little changed.

    Separately, Italian airline Alitalia, which had been
    keen to be a part of the Air France/KLM deal, said it had
    reached an agreement to begin talks with the French carrier
    on joining the combination.

    The deal will not bring all the benefits of a full
    merger because the two airlines will continue to operate as
    separate companies in some ways.

    Under the deal, both airlines will safeguard their
    national identities, logos and brands. Air France also gave
    assurances to the Dutch government that Schiphol airport in
    Amsterdam would become its second hub and be developed on
    equal terms with its
    Roissy Charles de Gaulle hub near Paris.
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