As announced this afternoon at a press conference, owner and investor Castlelake has acquired a surprising 32% stake in Scandinavian company SAS. Air France-KLM got a 19.9% stake, Lind, a Danish investor, has an 8.6% stake and the Danish government took a 25.8% stake.
Air France-KLM’s investment totals $144.5 million, of which $109.5 million will be allocated to ordinary shares and $35 million will be provided in the form of secured convertible bonds.
The consortium’s investment proposal is still awaiting finalization and is subject to certain conditions and regulatory approvals, including approval from the European Commission, the US court overseeing the Chapter 11 reorganization filed in mid-2022 and, in the event of SAS AB, from the Swedish court. This comes as the company continues to face a lack of demand following the COVID-19 pandemic and the conflict between Ukraine and Russia, which have led to rising operating costs.
The unexpected twist in this story is the emergence of Castlelake as the largest shareholder, when many expected US private equity giant Apollo Global Management to get the winning bid. Additionally, SAS announced its decision to leave the Stockholm Stock Exchange.
Goodbye Star Alliance, hello SkyTeam
At the same time, as part of this operation, and subject to the fulfillment of specific conditions, Air France-KLM’s investment will mark the departure of SAS AB from Star Alliance. Air France-KLM instead intends to establish commercial cooperation between the airlines of its SkyTeam group and SAS AB.
Air France-KLM is currently present in Aalborg, Billund and Copenhagen (Denmark), Stockholm, Gothenburg and Linköping (Sweden), as well as in Ålesund, Bergen, Kristiansand, Oslo, Sandefjord, Stavanger, Tromsø and Trondheim (Norway). However, when it comes to SkyTeam-affiliated airlines, only Delta Air Lines and Middle East Airlines operate in the Nordic market.
This development has the potential to reshape the aviation landscape in Scandinavia and Europe, with expected benefits for both SAS Norwegian Airlines and Air France-KLM and their partners.
The financial crisis looming over the European sky
In recent hours, the European aviation market has been shaken after SAS revealed its new investors to avoid bankruptcy.
Air France-KLM had to remain on the sidelines for a long time, constrained by the weight of the post-Covid state loan which prevented the Franco-Dutch group from participating through direct investments in the process of consolidation through acquisitions in transport. air.
Air France-KLM was therefore a helpless witness to the failure of Lufthansa in the ITA operation, because the commercial partnership that the Franco-Dutch group could offer to the Italian government was very weak compared to the 41% of German capital, like that of IAG with Air Europa.