Deutsche Lufthansa AG (Lufthansa) has made some huge announcements in recent months, including its programme to spend €2.5 billion (US$2.65bn) by 2025 on improving its customer experience, and a schedule for Lufthansa Group airlines to take delivery of more than 200 new short- and long-haul aircraft by 2030. These ambitious programmes will transform the airline, and as part of the Lufthansa Group’s strategy to focus more on its airline business in the future, it is divesting its catering segment. Deutsche Lufthansa AG (Lufthansa) has signed an agreement with private equity group, Aurelius, for the sale of its entire LSG Group business. The financials of the transaction have not yet been disclosed, but the deal is expected to close by Q3 2023, subject to relevant external approvals and internal carve-out activities.
The transaction will see Aurelius acquire all the classic catering, onboard retail and food commerce activities and brands of the LSG Group, including all 131 LSG Sky Chefs Customer Service Centers (CSCs) in the Americas (USA and Latin America), EMMA (emerging markets) and Asia-Pacific regions, plus onboard retail expert Retail InMotion (RiM), based in Europe, and SCIS Air Security Services in the US. The deal combines a total of around 19,000 employees worldwide and 36 joint ventures across the globe. The European LSG Sky Chefs activities were already sold in 2019 to Gategroup.
The deal enables both Lufthansa and LSG to focus on their core activities going forward. While Lufthansa will focus on key factors such as size and market positioning – and of course profits – the LSG Group will concentrate on executing its ambitious three-pillar strategy in order to leverage growth opportunities and lead the market in innovation, with the support of its new owner.
“We are pleased to have found the right investor for the LSG Group going forward that also has the full support of the LSG Group management. We are confident that Aurelius will enable the LSG Group to be well positioned in the years ahead. In turn, it enables us to focus even more on further improving the profitability and capital returns of the Lufthansa Group core business. As customers, our airlines are looking forward to a continued partnership with LSG Group beyond the sale,” said Remco Steenbergen, CFO of Deutsche Lufthansa AG.
“This is the beginning of a new chapter for the LSG Group,” added LSG Group CEO, Erdmann Rauer. “With Aurelius, we have found a trustworthy partner who buys into our global strategy, which focuses on the three pillars of airline catering, onboard retail and food commerce. We are excited for what the future holds for our company – especially for our employees – and the many business opportunities we plan to seize. With the support of Aurelius, we are confident that we will drive decisive change within our industry.”
