Air France and KLM to form Europe's largest carrier.

Publication: Europe Intelligence Wire

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COPYRIGHT 2003 Financial Times Ltd.

(From Agence France Presse)

Air France and KLM agreed to a French takeover of the Dutch airline through a complex deal that will create a new giant in civil aviation.

The new group could become an even more formidable player in the sector if Itay's national carrier Alitalia makes good in its bid to join.

The proposed share-swap announced Tuesday would see the creation of a holding company, Air France-KLM, that would maintain the brand distinctions, hubs and flight networks of the two companies, the airlines said in a joint statement issued in Paris and Amsterdam.

Air France would hold 81 percent of the group, to be led by Air France chairman Jean-Cyril Spinetta, with KLM owning the remaining 19 percent.

"We chose a very simple...

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