EUROPE. The Lufthansa Group has struck an agreement for the sale of the European catering operations of its LSG Group division to gategroup. The parties have agreed not to divulge the financial details of the transaction. The sale is subject to the approval of competition authorities.
Lufthansa said that this marked the first stage in a divestment of LSG Group. It said the sale of the remaining part of the company “should be initiated early next year”.
In addition to the LSG Group’s European catering business, the purchase agreement extends to its lounge business, retail convenience food specialist Evertaste, the SPIRIANT equipment business and the retail outlets and operations of the Ringeltaube brand. Ringeltaube offers tax free goods to staff and crew through 20 stores throughout Germany.
The businesses concerned currently employ 7,100 personnel and generated revenues of around €1.1 billion last year – about a third of the LSG Group’s total revenue. The transaction will not have any major impact on the EBIT or the net profit of the Lufthansa Group for 2019 or 2020, said the company.
“In gategroup we have found a new owner for LSG’s European business which has catering as its core activity,” said Deutsche Lufthansa Chairman of the Executive Board & Chief Executive Officer Carsten Spohr. “This gives the European part of LSG far better future investment prospects and further development opportunities.”
“At the same time,” Spohr continued, “this transaction marks the beginning of a long-term partnership between gategroup and the Lufthansa Group which will focus on catering our premium airlines at our Frankfurt, Munich and Zürich hubs. This ensures a high level of job security at these locations and our customers can continue to expect the highest quality of gastronomic experience onboard.”
A snapshot of LSG Group through its nine-month results performance above
The deal also includes a long- term contract for gategroup to cater flights at the Lufthansa Group’s Frankfurt, Munich and Zürich hubs. For the Frankfurt and Munich operations which provide catering for Lufthansa flights, Lufthansa will retain a minority shareholding in a new joint venture company.
“We have demonstrated in the past that we can successfully integrate new companies,” said gategroup CEO Xavier Rossinyol. “By combining the competencies of LSG and gategroup, we can offer a unique passenger experience based on culinary excellence and innovation. With the creation of a new Lufthansa-dedicated culinary studio and think tank, we will continue to develop our unique offering for passengers together with Lufthansa. This will firmly anchor an innovative, premium inflight service for Lufthansa.”
