The Polish Aviation Group - PGL (Polska Grupa Lotnicza - PGL), parent of LOT Polish Airlines (LO, Warsaw Chopin), has announced that it will acquire Condor (DE, Frankfurt International).

"The takeover of Condor fits perfectly with PGL's strategy. The purchase secures the future of Condor and thus offers its employees, customers and partners stability and a great perspective. We want to further develop the traditional Condor brand in Germany and introduce it to other European markets," PGL and LOT Chief Executive Rafał Milczarski was quoted as saying in a press release.

Condor will continue to be run by its current management and using its current brand while benefiting from enhanced connectivity and operational synergies between the airlines. The German carrier will become "the central pillar of the PGL tourism strategy", according to the press release.

During a press conference, Milczarski said that going forward, Condor will grow in Germany and in other countries, specifically mentioning Central and Eastern Europe. In terms of the required investment, he pointed out that Condor needed to renew its fleet, particularly its long-haul aircraft.

"The long-haul aircraft of Condor will require replacement in the next two to three years. We have enormous experience in the procurement of new aircraft. We are talking to the OEMs. We are running strategic analyses concerning the best fleet mix cover the entire PGL group," he said.

PGL intends to replace all sixteen B767-300(ER)s used by Condor.

"But it will be more than just 16 orders for replacement, we reckon at least 20. In the next three years, we will also need around ten additional widebody aircraft for LOT, so it will be 30 aircraft in total," Milczarski added, making clear that he expected cost benefits from the increased order size in comparison to LOT ordering aircraft alone.

The value of the transaction has not been disclosed. Milczarski said it was financed by a consortium of Polish state-owned institutions, including the banks Pekao SA, PKO BP, and BGK, and the insurer PZU. The chief executive of Condor, Ralf Teckentrup, said that the deal had been made possible by the support of German tour operators.

Chief Financial Officer Jean-Christoph Debus said during the press conference that Condor had received preliminary interest from "a double-digit number" of investors, of which six submitted indicative offers and three filed binding bids. According to earlier press reports, this trio consisted of PGL, Apollo Global Management, and Greybull.

The transaction is expected to be completed by April 2020 once the usual antitrust approvals have been received and Condor has completed the protective shield procedure. PGL's investment will enable Condor to fully repay the EUR380 million euro (USD420 million) bridging loan the airline received from the federal German and local Hesse state governments after the bankruptcy of its former parent, Thomas Cook Group.