Lufthansa to sell ground handling subsidiary
Lufthansa, the German airline, has agreed to sell its ground handling subsidiary GlobeGround to Penauille Polyservices, the French business services group.
The deal will create the world’s biggest provider of ground handling services operating at 199 airports in 39 countries with a workforce of more than 30,000.
Lufthansa said the transaction valued GlobeGround at E370m ($315m) “on a cash and debt-free basis”. The deal must be approved by the Lufthansa supervisory board and competition authorities.
GlobeGround will be merged with Servisair, the UK-based ground handling company, which was acquired by the French group in early 1999.
Penauille will initially acquire a stake of 51 per cent, with the remaining shares to be transferred at the end of June next year.
The ground handling sector is being rapidly transformed from being dominated by monopolies and small local independent operators into an industry of a small number of large global operators.
Lufthansa said consolidation was expected to continue, and Penauille planned to participate in it.
The German airline said it regarded Penauille as an important global partner. Lufthansa would remain majority shareholder in GlobeGround Deutschland, the operating company in its domestic market.
The move signals a change in Lufthansa corporate strategy towards more focus on its core airline business.
It said that the process of global consolidation in ground handling would require extensive investment and it had decided to withdraw from its strategic investment in international ground services.
GlobeGround, founded by Lufthansa in 1990 and with a turnover last year of E391m, serves more than 550 airlines through a network of ground handling operators at 112 airports in 32 countries.
Lufthansa was advised by Merrill Lynch and Penauille by Deutsche Bank.