The Lufthansa Group has reached an agreement with Italy's finance ministry to purchase a 41% stake in state-owned Italian airline ITA Airways for $348 million.
Once the deal is finalized, plans call for ITA to immediately begin cooperating commercially and operationally with the Lufthansa Group airlines -- Lufthansa, Swiss, Austrian and Brussels as well as several smaller brands.
Lufthansa has also negotiated an option to purchase the remaining shares of ITA at a later date, with the price to based upon the business development of ITA.
"Today's agreement will lead to a win-win situation for Italy, ITA Airways and Lufthansa Group," Lufthansa Group CEO Carsten Spohr said in a prepared remark. "And it is good news for Italian consumers and for Europe, because a stronger ITA will invigorate competition in the Italian market."
The deal has been a while in the making. Last May, Lufthansa Group and MSC Group together placed a formal bid for ITA. Those talks ultimately broke down, but Lufthansa reengaged with the Italian Ministry of Economy and Finance in January.
In its statement Thursday, Lufthansa said that it expects the contract to be finalized shortly. Prior to closing, the deal must also be approved by European competition authorities.
As part of the arrangement, Italy has agreed to infuse $268 million into ITA, Lufthansa said.
The addition of ITA would bring substantial strategic value to Lufthansa, which calls Italy its most important market outside of home markets and the U.S.
Under the arrangement, ITA is to retain its brand and have its own management team. But the carrier would gain access to the networks of other Lufthansa Group airlines as well as Lufthansa's sales and marketing channels and its centralized revenue management system.
ITA replaced legacy brand Alitalia as Italy's state-run airline in 2021. The carrier has hubs in Rome and Milan and flies to 64 destinations, including 21 within Italy and 43 abroad.
ITA's U.S. destinations include New York, Boston, Miami and Los Angeles.