- Title: BELGIUM: VIRGIN EXPRESS SEALS MERGER WITH SN BRUSSELS
- Date: 5th October 2004
- Summary: (EU) BRUSSELS, BELGIUM (OCTOBER 6, 2004) (REUTERS) 1. LV VIRGIN EXPRESS AND BRUSSELS SN AIRCRAFT AT AIRPORT (3 SHOTS) 0.17 2. SV NEWS CONFERENCE TABLE; CU TOY PLANES-VIRGIN AND SN BRUSSELS AIRLINES (2 SHOTS) 0.29 3. MCU (English) ETIENNE DAVIGNON, CHAIRMAN OF HOLDING SAYING: "Both parties and the negotiations were long, negotiations was fair. The negotiations implied that both parties would defend their stake as well as their good, keeping in mind the added value which will be created. It was also long because if you have a company in which you have two shareholders, you have to agree before the two shareholders come together so that the implementation is not complicated by disputes between shareholders. That is why we wanted to make sure everything was correct." 1.16 4. CU TOY PLANES 1.21 5. MCU (English) MURPHY STEPHEN CHIEF NEGOTIATOR FOR VIRGIN EXPRESS, SAYING: "We are living interesting times in the European aviation market and I think that both businesses have recognised the need to conclude this transaction in the interest of all of the parties as stated in the press release." 1.39 6. SLV NEWS CONFERENCE 1.44 7. MCU (English) ETIENNE DAVIGNON, CHAIRMAN OF HOLDING SAYING: "What is the difference, it remains at it is today, low fare on one side, full service on the other side, IATA related and so on." 1.55 (EU) CHARLEROI, BELGIUM (FILE) (REUTERS) 8. SLV CHARLEROI AIRPORT TERMINAL; SLV RYANAIR AIRCRAFT ON TARMAC (5 SHOTS) 2.26 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 20th October 2004 13:00
- Keywords:
- Location: BRUSSELS, CHARLEROI, BELGIUM
- Country: Belgium
- Reuters ID: LVAAQ34PSQIYAF59PZGNZNRCQ0M4
- Story Text: Virgin Express seals merger with SN Brussels.
Full-fare operator SN Brussels Airlines said on
Wednesday (October 6, 2004) it had finalised its planned tie-up
with low-cost carrier Virgin Express, ending rivalry
between the two companies based at Brussels's main airport.
Virgin Express, part of British entrepreneur Richard
Branson's network of Virgin-branded enterprises and SN
Brussels, successor to bankrupt Belgian flag-carrier
Sabena, signed the deal late on Tuesday (October 5) after
six months of talks.
"The negotiations implied that both parties would
defend their stake as well as their good, keeping in mind
the added value which will be created. It was also long
because if you have a company in which you have two
shareholders, you have to agree before the two shareholders
come together so that the implementation is not complicated
by disputes between shareholders. That is why we wanted to
make sure everything was correct," said Etienne Davignon,
the chairman of the holding company that will own the two
airlines.
Davignon also told RTBF radio that he did not expect
any job losses in the immediate term.
SN Brussels and Virgin Express will continue to operate
separately, but hope to make savings by ending duplication
of routes and wielding more joint purchasing power.
"We are living interesting times in the european
aviation market and I think that both businesses have
recognised the need to conclude this transaction in the
interest of all of the parties," said Murphy Stephen, chief negotiator for Virgin Express.
SN Brussels said it expected 44 million euros (54
million U.S. dollars) in synergies from the deal. It
expected the consolidated earnings before interest and tax
(EBIT) of the two companies to be boosted by 25 million to
35 million euros.
Virgin Express Holdings Plc will own 29.9 percent of SN
Airholding, the holding company that will control the two
airlines.
The private investors behind SN Brussels own the
remaining shares and have an option to buy out Virgin's
stake for 75 million euros at any point from the first to
the third anniversary of completion of the deal.
Virgin has an equivalent option to offload its stake
for 54 million euros.
It offered to buy out minority shareholders at 1.00
euros per share. The illiquid shares closed at 1.35 euros
on Tuesday.
Both airlines have been under pressure from Irish
no-frills carrier Ryanair, which flies from Charleroi
airport 40 km (25 miles) south of Brussels.
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