Air France announced that it has agreed to pay $432 million (323 million euros) for 25% stake in the troubled Italian Airline Alitalia. 

Roco Sabelli, CEO of CAI the owner of Alitalia in a press conference mentioned, “Air France showed more conviction than other suitors”.

Alitalia declared bankruptcy on Aug 29th 2008 and has been subjected to various suiters like Lufthansa, etc. The future of the airlines was in grave danger esp. due to it past financial records and current labor problems. CAI decided to combine Alitalia with Air One and get a minority foriegn partner for which Lufthansa and Air France showed interest.

Lufthansa's Bid

Officials from Lufthansa complained that they were not provided the required information to provide a firm bid despite the fact that they were the earlier of the suiters for buying the airlines.

From Wall Street Journal -

Alitalia's Italian managers had the advantage of "defining the company at the bottom of the market," said Air France-KLM CEO Pierre-Henri Gourgeon. The two carriers announced on Monday that Air France-KLM would invest €323 million ($432 million) for 25% of the new Alitalia.

"We picked the assets, we didn't take the debt. The cost of redundancies is covered by the government, and we have new employment contracts," Mr. Gourgeon said in an interview. He added that by establishing the new airline now, amid a deep industry crisis, the operation should be well positioned for growth.

The agreement will give Air France-KLM "the best possible access to the Italian market," Mr. Gourgeon said.