Alitalia and Etihad Group Finalize $2.35 Billion Acquisition Deal

Alitalia Airlines, the struggling Italian airways and Etihad Group, the flagship carrier of Abu Dhabi, have finalized a $2.35 billion acquisition deal, where Etihad purchases 49 percent stake in Alitalia.

News of the deal's completion comes months after the two airlines agreed to the deal. Etihad will reportedly invest $751 million in the Italian airline and will also write off $801 million in debts. It will also infuse capital of $410 million to keep Alitalia afloat in the business, The Wall Street Journal reports.

There will be financial and managerial restructuring at Alitalia .The airline will also focus on Italian tourism and trade promotion. It will fly new routes to Abu Dhabi and several other destinations.

 "For Etihad Airways, this is a strategic, long-term commercial investment. On completion, we are committed, with the other shareholders, to build a reinvigorated Alitalia as a competitive, sustainable and profitable business that can operate successfully in the global air travel market," Etihad Airways President and Chief Executive Officer, James Hogan, said in a press release.

"We believe in Alitalia. It is great brand with enormous potential. With the right level of capitalisation and a strong, strategic business plan, we have confidence the airline can be turned around and repositioned as a premium global airline once again.

"Alitalia is the perfect ambassador for Italy and all that it represents. As we revitalise the brand, the airline will increasingly embody all that we recognise as quintessentially Italian - the history, culture, food and fashion. It must be an airline of which Italians can be proud of."

"However ultimately it has to work as a business and the goal is for sustainable profitability from 2017," Hogan said in an official statement.