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Lufthansa flies the flag for Europe

While it was expected by many in the industry, the news that the Lufthansa airline is currently in talks to acquire Scandinavian airline group SAS is set to push Lufthansa to second in the European league table. The group had already been very vocal in its thoughts that bargains would appear and because of a robust business model and strong balance sheet, they would not be shy in stepping into the breach.

As the news was announced shares in SAS rose by just under 10% valuing the group at around $1.3 billion. In the overall context of the Lufthansa group this is very much small change but offers the opportunity to further expand the group's growing network of operations. Under normal circumstances the move may have run into political turbulence with the Swedish government owning 21.4% of SAS, the Norway authorities claiming 14.3% and the Danish government also in there with a 14.3% stake, but times are very difficult.

It is hoped that the major shareholders mentioned above will appreciate the safety net which a larger parent group offers and allow the deal to flow smoothly, but then again this is politics!

The clever money is on the deal going through but you never know what is around the corner.

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