Lufthansa closes $300M deal to be JetBlue's largest shareholder
By James Bernstein
[email protected]
9:17 AM EST, January 23, 2008
Deutsche Lufthansa, the German airline, has become the largest shareholder of JetBlue Airways Corp. of Forest Hills, completing its purchase of 19 percent of the discount carrier's outstanding shares.
Under the deal, announced in December, Lufthansa bought 42 million newly issued shares in a private placement, at $7.27 apiece. Lufthansa paid about $300 million for the shares.
With its 19 percent stake, Lufthansa has become JetBlue's largest shareholder. Fidelity has a 14.97 percent stake in JetBlue.
"With the conclusion of the financial transaction, Lufthansa and JetBlue will begin exploring innovative commercial arrangements designed to benefit both airlines and their customers," Lufthansa, Europe's second-largest airline, said in a statement released Tuesday from its headquarters in Cologne, Germany.
The deal gives both airlines new sources of passenger traffic. Lufthansa also will be able to nominate a director to sit on JetBlue's board.
Under U.S. laws, Lufthansa is barred from an outright takeover of JetBlue. Foreign airlines may own up to 25 percent of a U.S. carrier's stock.
JetBlue, which began operations in 1999, is the largest carrier based at Kennedy Airport, and one of the largest discount airlines in the U.S. Lufthansa has its North American headquarters in East Meadow, near the Nassau Coliseum and Roosevelt Field.
Shares of JBLU fell 19 cents Tuesday, to close at $4.49.
Copyright © 2008, Newsday Inc.
