ROME, July 3 (Xinhua) -- The European Commission on Wednesday gave its approval to the proposed merger between Italian flagship carrier ITA Airways and Germany's Lufthansa.
The deal between the two airlines has been in the works since ITA Airways was formed in 2020. The German carrier had also been in talks with Alitalia, the predecessor to ITA Airways, before Alitalia went bankrupt and was dissolved and then restructured as ITA Airways.
Giancarlo Giorgetti, Italy's minister of finance, praised the deal, saying it would help make Rome "a hub for air travel to the United States and Africa" through the Lufthansa network.
The European Commission's approval is conditional on the implementation of certain conditions aimed at preserving competition on some routes where Lufthansa already has significant operations and where competition could be hindered by adding ITA Airways' flight routes. Lufthansa has already made some concessions on routes, and it is expected to make further concessions in the coming weeks.
But by combining the two networks, ITA will gain access to Lufthansa's network that covers most of Europe, North America, and Asia. Lufthansa, meanwhile, will gain comprehensive access to the Italian market as well as ITA Airways routes to Africa and major U.S. cities.
According to the terms of the deal, Lufthansa will acquire a 41 percent stake in ITA Airways from Italy's Ministry of Finance for 325 million euros (350 million U.S. dollars). The Ministry of Finance will control the remaining shares. Lufthansa will take over complete control of the Italian company by 2033 at a total cost of 829 million euros. (1 euro = 1.08 U.S. dollar)
