Two new investors buy into Air Berlin

German and Turkish investors are taking significant minority stakes in Air Berlin, ending months of uncertainty over the second German carrier's future ownership and emerging as two new anchor shareholders.

Tui Travel, the London-listed leisure group that is majority-owned by Germany's Tui, has entered a strategic alliance with Air Berlin under which it will acquire a 19.9 per cent stake for €64.8m ($86m) through an issue of new shares.

It is paying €3.97 a share, which represents a significant premium to Friday's closing price of €3.08.

Separately, ESAS Holding, a Turkish conglomerate with interests in aviation, healthcare, food, property and home appliance retailing, said it had acquired a stake of 15.3 per cent in Air Berlin from UBS, the Swiss bank.

The stake represents most of the 18.9 per cent holding sold last January by Access Industries, controlled by Len Blavatnik, the Russian-born US citizen.

ESAS, which owns Pegasus Airlines, the second largest Turkish carrier, would have one seat on Air Berlin's board.

Mr Blavatnik, previously the largest shareholder in Air Berlin, bought into the airline only in May last year but saw the carrier's share price fall by about 40 per cent as the airline industry struggled to cope first with the surge in fuel prices in the first half of last year and subsequently with the deepening recession.

Under the strategic co-operation deal with Tui Travel, Air Berlin will take a 19.9 per cent stake in Tui's struggling German airline operations, Hapag-Lloyd Flug and Tuifly.

Air Berlin will take over the operation of Tuifly's scheduled route network, leasing 17 of its aircraft, including crews, and flying under the Air Berlin brand from the start of the next winter season at the end of October.

Tuifly will retain control of the Tui group's German charter operations with the remaining 21 aircraft flying for its holiday tour operations under the Tuifly brand.

The cross-shareholding deal, which is subject to approval by the competition authorities, is due to take financial effect from October 1.

Joachim Hunold, Air Berlin's chief executive, said the strategic alliance gave the group access to three "highly interesting markets" in Cologne, Stuttgart and Italy.

He said: "Air Berlin can expand its European as well as its domestic route network, which is especially important to our business passengers".

The two deals announced at the weekend will help the troubled German carrier, Europe's third largest budget airline, deter hostile bidders as its stock languishes near record lows.

The transaction is the latest in a growing trend among German companies to find so-called anchor investors to protect them from predators. Recession is hammering corporate profits and pushing asset prices down to bargain levels.

Daimler last weekend announced that a state-owner investment company from Abu Dhabi was taking a 9.1 per cent in the German carmaker, reeling from a fall in car purchases much as Air Berlin is suffering from a slump in travel.

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