The Swedish and Norwegian governments have initiated a process which could lead to them selling their total shareholdings in SAS Scandinavian Airlines – often referred to as the flag carrier of Sweden, Norway and Denmark.

 

This follows announcements by both governments that they have disposed of 19m shares via auction – equivalent to 5.8% of the total equity.

 

COULD THIS TRIGGER A TAKEOVER?

This effectively sees Sweden’s shareholding reduce from 21.3% to 17.2% and Norway’s from 14.2% to 11.5%. The Danish government has not sold any of its 14.2% share, although it has indicated in the past that it may sell at a future date.

 

All three countries propped the airline up by securing equity stakes back in 2010, but all added at the time that these holdings would eventually need to be sold.

 

Not surprisingly, this fast sale process has triggered speculation that a full takeover bid could be launched by a predator and Lufthansa seems to be top of the analyst’s guess list at present, although this is just speculation.

 

‘TALK’ HAS NOW BECOME ACTION….

This ‘physical action’ by both Sweden and Norway to turn some of their shareholding into cash is significant however, since it ends the small talk of many years that SAS would inevitably be returned to full public ownership – even though this may still take some time to achieve.

 

Despite positive comments on the partial sales (for now) from both governments in Norway and Sweden, any privately-owned SAS will also have to stand on its own two feet against strong competition from other carriers in the region – so strengthening its belief that it will ultimately need an airline partner.

 

These include Norwegian, Lufthansa, Air France-KLM and many other carriers not directly located in the region, but serving it on a competitive basis.

 

SAS Scandinavian Airlines’ inflight duty free offer is provided by gateGroup, which, in turn, is presently being acquired by China’s HNA Group. Gategroup acquired the Stockholm/Tibro-based Inflight Service Group for around CHF130m ($131.4m) after closing the deal last February.

 

For full details, click here: http://www.trbusiness.com/regional-news/international/gategroup-closes-127m-inflight-service-purchase/100890