Air France-KLM to take majority stake in Scandinavian carrier SAS
The Franco-Dutch airline group said on Friday it intended to increase its stake from 19.9% currently by acquiring the stakes held by top shareholders Castlelake and Lind Invest.
The purchase, subject to regulatory clearances, is expected to close in the second half of 2026, Air France-KLM said.
The value of the investment would be determined at closing, based on SAS's latest financial performance, including core earnings (EBITDA) and net debt, the company said. It declined to give details on those metrics.
SAS flies to Dublin from Oslo, Copenhagen, and Stockholm. Air France flies from Cork and Dublin to Paris. KLM flies to Amsterdam from Cork and also flies transatlantic to Dublin, with 142 weekly flights from the capital.
Air France-KLM expects to generate "three-digit million" euro in synergies from raising its SAS stake, Air France-KLM finance chief Steven Zaat told analysts on a call. Mr Zaat said the deal would be funded from cash or a "plain vanilla bond" and would not impact the drive to reduce the group's hybrid debt. "We have ample room for it," he said.
Air France-KLM shares were flat in early trading.
JPMorgan analysts said there were reasons to be positive about the deal. "SAS offers deeper access to a GDP-rich region in Scandinavia, there will now be an opportunity to unlock cost synergies as SAS becomes a subsidiary of the group," they said in a note, adding that "industry consolidation should also be viewed positively for the whole sector, even if not game-changing in terms of size."
SAS welcomed Air France-KLM's announcement. "European consolidation had to happen further, and we're very happy to be part of that," SAS CEO Anko van der Werff told Danish broadcaster TV2.
"In the current setup where Air France-KLM is a 19.9% shareholder, they're still a competitor," he said. "With the new stake, going above 50%, we can really tap into all of those synergies and offer those benefits to customers."
SAS said it would continue to invest in its fleet and network.
In 2023, Air France-KLM said it would invest about $144.5m (€122.7m) for its initial SAS stake, boosting its presence in Sweden, Denmark and Norway with the option to become a controlling shareholder after a minimum of two years, subject to conditions.
SAS exited from Chapter 11 bankruptcy protection in August last year.
The two carriers have already had a commercial cooperation since summer 2024. Control of SAS would allow Air France-KLM to expand in the Scandinavian market and create additional value for shareholders, Air France-KLM said in a statement.
"Following their successful restructuring, SAS has delivered impressive performance, and we are confident that the airline's potential will continue to grow through deeper integration within the Air France-KLM Group," said Air France-KLM chief executive Ben Smith.
The deal comes as executives seek more consolidation in Europe's fragmented airline industry, which they say is needed to compete with US and Middle Eastern rivals.
Earlier this year, Germany's Lufthansa bought a 41% stake in Italy's ITA Airways and a stake in Air Baltic. The Portuguese government is looking to privatise its national carrier TAP.
Lufthansa and Air France are also in talks about buying a stake in Spain's Air Europa.
SAS has 138 aircraft in service and carried more than 25 million passengers last year, generating revenues of €4.1bn.
Air France-KLM group would have a majority of seats on the board of directors, while the Danish state will keep its 26.4% stake in SAS and its seats on the board.
Reuters
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