The transaction, which has been approved by the boards of both companies, represents the first significant investment by a European airline in a
Under the terms of the agreement, Lufthansa will purchase in a private placement about 42 million newly issued common shares of JetBlue, or 19% of the New York JFK-based airline’s equity.
Lufthansa is acquiring the shares for $7.27 apiece, or a total of about $300 million. This represents a 16% premium to yesterday’s closing price of $6.25.
A Lufthansa nominee will be appointed to the JetBlue board upon closing of the transaction, which is expected to occur in the first quarter, pending regulatory review and approval.
Opportunities to further cooperate will be explored, say the airlines.
In addition to previously-announced discussions with Aer Lingus, JetBlue has made known its interest in forging potential new international partners. In April, JetBlue told ATI that its dominance at JFK gives the carrier a strong position in offering North American feed to the international airlines that serve JFK.
Today’s agreement “reaffirms our belief in JetBlue’s disciplined growth plan and will also improve our balance sheet and give us greater financial flexibility as we move into 2008”, says JetBlue CEO Dave Barger.
Lufthansa Group chairman and CEO Wolfgang Mayrhuber adds: “The transaction links two airlines with international reputations for quality, innovation and a service culture.
Read the Airline Business blog post by Brendan Sobie: Barger shuns Mannion for Mayruhber