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Swissair snaps up Sabena
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April 26, 2000: 11:07 a.m. ET
Swiss carrier to take control of Belgian partner in landmark deal
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LONDON (CNNfn) - SAirGroup, parent of Swissair, agreed Wednesday to boost its stake in Belgian carrier Sabena, the first cross-border takeover of a major international airline.
SAirGroup, Europe's fourth-largest airline, bought 49.5 percent of Sabena in 1995 and will boost its stake in the smaller airline to 85 percent by exercising options and acquiring shares currently owned by the Belgian government. Belgium will take a 3.3 percent stake in SAirGroup.
The Swiss firm has been seeking to take control of Sabena but has been prevented by international regulations that prevent an overseas airline having "effective control" of another carrier.
Switzerland is seeking closer ties with the 15-nation European Union to permit Sabena to operate within the EU even though its owner is not registered in an EU member state.
However, SAirGroup conceded that the deal also hinges on the outcome of Belgian government talks to renegotiate its aviation treaties with non-EU countries to which Sabena flies.
SAirGroup will exercise warrants to boost its stake in Sabena to 67.5 percent and then buy 17.5 percent held by the Belgian government, which has the right to boost its SAir stake to 5.5 percent in return for selling its remaining 15 percent holding in Sabena.
 The Swiss carrier has run Sabena since acquiring its minority stake and has built up its Qualiflyer group of airlines through a series of acquisitions since parting from former alliance partners Delta Airlines and Singapore Airlines last year. SAirGroup already has stakes in TAP Air Portugal, South African Airways and Lot Polish Airlines.
SAirGroup said it would seek an additional stock market listing on the Euronext bourse, the exchange to be formed via a merger of the Brussels, Paris and Amsterdam bourses.
The deal is subject to the approval by European Union regulators and depends on the successful ratification next month in a Swiss referendum of plans for closer ties with the EU. 
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SairGroup
Sabena
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