Lufthansa Group has ‘initiated a process’ for the sale of its LSG Group catering unit (LSG Skychefs).

Confirmation that a divestment is on the horizon was highlighted in a presentation to investors and analysts during the company’s Capital Markets Day, which took place in Frankfurt on 24 June.

In December, Reuters reported that Carsten Spohr, Chairman of the Executive Board and CEO, Lufthansa Group told a German newspaper the previous month that the airline was considering divesting LSG.

A further Reuters report emerged in April 2019 suggesting the group had taken the first formal steps towards selling LSG and that Austrian catering company Do&Co and Switzerland’s gategroup were expected to make offers. But according to documents seen by TRBusiness, the divestment process is further down the line.

LACK OF SYNERGIES

The documents indicate that the divestment is driven by a lack of synergies between LSG and Lufthansa Group airlines and the German group’s desire to focus more on its core airline business. They also indicate that a full or partial divestiture is possible and that the German company will consider future supply arrangements as part of any sale.

A Lufthansa Group spokesperson, who declined to reveal the identities of any potential investors told TRBusiness: “We are discussing with possible investors where we want to go and what the next steps could be. We have not clarified anything regarding the specific details in terms of how a deal could look and the kind of ingredients it could have.

“The latest news is that we have put LSG Group in the shop window and that possible investors can have a look at LSG and enter discussions. We will see what happens.”

The spokesperson, who confirmed the aforementioned Reuters report indicating that the divestment process had tentatively begun in April 2019 added: “If you look at LSG, more investment is required to bring it up in the international market.

“As we focus more on the latest and most modern aircraft, we have to put our investments there. This means we are probably not the right owners for the LSG Group in terms of bringing in the investment needed to focus on the catering market.

“This is why we have decided to go down this road,” he concluded.

LSG Group, which comprises Retail inMotion, LSG Sky Chefs, Spiriant (equipments solutions) and Evertaste (convenience food), declined to comment when contacted by TRBusiness.