The Lufthansa management wants to give part of the subsidiary to investors. A decision could be made in the fall as to whether there will be a deal.
(Photo: dpa)
Frankfurt The list of bidders for the technology subsidiary of the Lufthansa Group shrinks to two interested parties. According to information from financial circles, the financial investors Bain and Advent are also bidding for part of Lufthansa Technik. A spokesman for the airline declined to comment on the issue. There was no comment from investors either.
Germany’s largest airline is looking for an investor who will take over 20 percent of the technology subsidiary. It specializes in aircraft maintenance, but also offers the conversion of jets into government aircraft, for example. Lufthansa Technik is valued at six to seven billion euros.
The financial investor CVC has meanwhile withdrawn from the bidding race, as can be heard in financial circles. Bain and Advent, on the other hand, have recently had access to the Lufthansa subsidiary’s so-called data room. Here you can see all the numbers of the service provider, the prerequisite for a final bid. But that will last until well into the fall, according to those close to the bidders.
Most recently, the topic of governance was discussed. This means the question of how much say an investor gets. “Lufthansa Technik remains the core of the company,” said CEO Carsten Spohr repeatedly. Accordingly, the company management wants to determine the strategy of the offshoot.
On the other hand, the Lufthansa management expects strategic added value from the investor. He should help to expand the business. In the meantime, there has been a fundamental agreement on the subject of governance, reports in financial circles.
Aircraft maintenance – a $100 billion market
In the further talks between Lufthansa management and bidders, it should now be about how the investor wants to further develop the technology specialist. The global maintenance business is dominated by large companies, including the largest aircraft manufacturers Airbus and Boeing. Every year, as much money is spent worldwide on maintenance as on the purchase of new aircraft: between 80 and 100 billion dollars.
Because airlines from India or Turkey, for example, want to massively expand their fleets, experts expect strong growth. Smaller maintenance companies could no longer keep up and were put up for sale. Lufthansa Technik is to participate in a possible consolidation of the industry.
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Spohr is currently converting the Lufthansa Group from an aviation group to an airline group that focuses on the core business of transporting people and goods. That means: The management parted with holdings that are not directly related to flying. The catering subsidiary LSG and the business travel service provider Airplus have now been sold. The insurance subsidiaries Delvag and Albatros could still be sold.
The investments should essentially flow into this conversion – into the purchase of new aircraft, but also of other airlines, as recently in the case of the Italian ITA.
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