Lufthansa's intention to buy a stake in Italian ITA opens up for further consolidation among airlines, analysts say Reuters. Among other things, SAS is being identified as a potential takeover candidate.

On Wednesday, German airline Lufthansa announced its intention to buy a stake in the Italian state-owned airline ITA.

”"The plan is to initially agree to acquire a minority stake as well as options that enable the purchase of the remaining shares at a later date," the German aviation giant stated.

The potential deal between Lufthansa and ITA paves the way for further mergers in the European market. Many European state-owned airlines have had financial problems since the pandemic hit, but consolidation could make the recovery more profitable, analysts told Reuters.

Bernstein analyst Alex Irving points out TAP, which is owned by the Portuguese state, as the main takeover candidate, as the country's government has already said it is considering a sale of all or part of the company. The analyst points to Lufthansa, Air France-KLM or British Airways parent company IAG as potential buyers.

Both Alex Irving and Kepler Cheuvreux analyst Ruxandra Haradau-Döser also highlight SAS SAS -2.32% as a company that can be bought up. The company is, as is known, undergoing a reconstruction process, and CEO Anko van der Werff has previously said that the company will begin its capital raising at the end of this month, with the goal of raising 9.5 billion kronor.

A third company that the two analysts point to as a takeover candidate is the British low-cost airline Easyjet, where Swede Johan Lundgren is CEO and the founding family Haji-Ioannou is the largest owner.

SAS shares are now trading at around 48 öre, giving a market capitalization of 3.5 billion kronor. The Danish and Swedish states each own 21.8 percent of the company.

Source: DI.SE