PARIS/AMSTERDAM: Over 89% of the share capital of Dutch airline KLM has been tendered to Air France in a buyout offer which creates the world's largest airline by revenues.
In a joint statement yesterday, the airlines said KLM holders had tendered 41.76 million shares, well above the 70% threshold that Air France said it needed to call the 833mil euro takeover a success. The bid closed on Monday night.
The carriers said a second acceptance period was to begin yesterday and run until May 21 under the same terms as the initial offer. Air France needs to win 95% of KLM to force a so-called squeeze-out of KLM minority shareholders and delist the Dutch carrier.
The combination of the two carriers represents the first crossborder merger of major European airlines and creates a company that ranks ahead of Japan Airlines System Corp as the largest airline in the world by sales.
Air FranceKLM will rank third behind AMR Corp's American Airlines and UAL Corp.'s United Airlines in terms of passenger traffic.
The two airlines have agreed to form a joint holding company under which the Air France and KLM brands will co-exist for three years.
The company, Air FranceKLM, will own 100% of both airlines but KLM will remain Dutch, with 51% of its voting rights held by the state and two foundations. That structure will allow KLM to retain its foreign landing rights.
Shares in a combined Air FranceKLM are due to begin trading today in Amsterdam, New York and Paris. In early trading yesterday, Air France shares stood 0.75% higher at 14.76 euros while KLM stock was trading up 0.54% at 16.90 euros. Reuters
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