(Bloomberg) -- Germany will offer Deutsche Lufthansa AG a 9 billion-euro ($9.8 billion) bailout that thrusts the state back into the heart of a company privatized with fanfare two decades ago.
The aid package involves taking an initial 20% stake that could rise to 25% plus one share in the event of a takeover, according to a statement on Monday. The plan, which requires European Union approval and will almost certainly be challenged by rival airlines such as Ryanair Holdings Plc, gives German officials an effective veto over company strategy.
While Lufthansa fought for weeks to limit government influence, its management board is expected to approve the deal quickly before asking the firm's supervisory board to vote on it, according to people familiar with the matter. Europe's largest airline last week warned that it required “urgent” assistance after the fallout from the coronavirus grounded most of its fleet.
The package represents the biggest corporate rescue in Germany during the pandemic crisis. It's also the only one that involves a direct investment by Chancellor Angela Merkel's government, but more may be coming. The government set up the 100 billion-euro fund to buy stakes in stricken companies as part of its effort to stabilize Europe's largest economy.
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
