Air France-KLM to buy Alitalia

ITALIAN state airline Alitalia has agreed to be bought by Air France-KLM, for a smaller than expected consideration of €138 million and a pledge to buy back bonds.

The takeover would avoid the flagship airline going broke as its cash reserves have quickly dried up on the back of the EU ban on further state aid for airlines. The price is well short of the 35c per share which Air France-KLM was said to have initially bid.