Virgin Atlantic founder and prolific businessman Richard Branson has pulled out of a proposed deal to sell part of his shares to Air France-KLM. Agreed two years ago, the deal was for a 31% stake in Virgin Atlantic, which would have left Delta Air Lines as the majority shareholder. Now, Branson will retain his 51% stake and overall control of the British airline.
Scrapping the Deal
Back in 2017, the Air France-KLM Group had agreed to buy a 31% stake in Virgin Atlantic as part of a three-way joint venture including Delta Air Lines. Reported to be worth £220m ($284m), the stake sale would have seen Branson’s holding reduced to just 20%, with Delta Air Lines the majority shareholder with its existing 49%.
However, Richard Branson has changed his mind on the deal, preferring instead to retain a majority shareholding and overall control of the airline. Virgin Atlantic told Bloomberg that the joint venture with the Air France-KLM Group is unaffected by this move, and that the revenue and profit-sharing agreements will be implemented soon.
Air France-KLM was unavailable to comment at this time.
This comes on the back of the deal finally receiving approval from the US Department of Transport. For two and a half years, the DoT has been investigating the deal, but finally issued its seal of approval last month.
Branson’s Letter to Employees
Branson personally sent a letter to all Virgin Atlantic and Virgin Holidays employees sharing the good news. He chose to also share it online, in a bid to spread the word that Virgin Atlantic is still his baby.
In the letter, he harks back to the formative days of the airline, when it was just one second-hand 747 trying to take on the giants of the day. He notes that the airline was ‘born’ around the same time as his own two children, Holly and Sam, and how it has been his third child ever since.
Speaking proudly about the airline’s partnership with Delta, he explains how he thought that the partnership with Air France-KLM would require a reduction in his shareholding. He says that,
“I was willing to do so, reluctantly, to guarantee the long-term success of Virgin Atlantic.”
Thankfully, he has not had to do this after all. The Branson’s will retain their shares of the company going forward, as Virgin enters its half centenary year in 2020. However, he also makes it clear that Virgin is not giving up the fight for more slots at Heathrow, saying,
“Just like in 2008, we’re at a point in time where we need to stand up for fair competition for the benefit of British customers and businesses. So we’ll continue to be vocal throughout 2020 with our ‘Two Flag Carriers’ campaign, urging ministers to grasp the once in a generation opportunity to shake up the status quo at Heathrow. Because Britain deserves better.”
Portions of this article originally appeared Simple Flying
Original Author Joanna Bailey