Lufthansa completes sale of British Midland to IAG
Deutsche Lufthansa AG (Lufthansa) has completed the sale of British Midland Ltd. (bmi) to International Airlines Group (IAG). The completion of the sale took place after close of business on 19 April 2012. The gross purchase price amounts to GBP 172.5 million (approx. EUR 207 million).
As price adjustments have been agreed as part of the transaction structure, the net purchase price will be determined at the end of the second quarter 2012, at which point the final amount will be transferred. It continues to be expected that the net purchase price will be negative. However the costs of the transaction for Lufthansa will amortise within one year. The gross purchase price is expected to be reduced by a number of items including agreed deductions for not selling bmi regional and bmibaby prior to the completion of the transaction.
bmi’s underfunded Pension Scheme is to be transferred to the UK Pension Protection Fund. The pension shortfall for the members of the bmi Pension Scheme will be offset to a large extent by a one-off contribution from Lufthansa of GBP 84 million to a supplementary pension scheme.
On 4 November 2011, Lufthansa and IAG agreed in principle to the sale of bmi to IAG, prior to a legally binding purchase agreement being signed by both parties on 22 December 2011. The validity of this contract was subject to regulatory approval by the European Commission, which was received on 30 March 2012. By carrying out this transaction, Lufthansa is selling a consistently loss-making company.