Finnair (OMXH: FIA1S) and LSG Sky Chefs (LSG Lufthansa Service Holding AG) have signed a Memorandum of Understanding for the latter to acquire the former’s catering operations. The acquisition would include the entire share capital of both Finnair Catering Ltd. and Finncatering Ltd. Finnair has been considering outsourcing the services for quite a while and had previously announced it was looking for a partner.
LSG Sky Chefs is a subsidiary of the German Lufthansa AG (FWB: LHA, OTCQX: DLAKY). It is the largest in-flight services provider in the world. Its service offering includes catering, in-flight retail and other supporting services. The agreement is subject to competition authorities’ approval in Finland and Lufthansa’s Board decision. Finnair has already been utilizing LSG Sky Chefs’ services outside of Finland.
Finnair expects to reap considerable annual savings. Net sales of the businesses are in 80 million Euro region. Approximately 650 employees will move to LSG Sky Chefs. In this case Finnair Travel Retail service is not part of the deal. Finnair has opened flat in morning trading.
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