UPDATE: Lufthansa Closes Takeover Of Austrian Airlines

German flagship airline Deutsche Lufthansa AG (LHA.XE) has concluded its takeover of Austrian Airlines AG (AUA.VI), the airline said Thursday.

All conditions for the transactions are now fulfilled, Lufthansa said.

Austrian Airlines, which has been squeezed financially in recent years, first by high jet fuel prices and then by the economic downturn and falling passenger numbers, will become part of Lufthansa as of September.

The European Union Commission approved the merger on the condition Austrian Airlines give up routes between Vienna and a number of German destinations and Brussels. It also approved EUR500 million of restructuring aid injected into Austrian Air by the Austrian government on the condition Austrian Air shed 15% of its flight capacity before the end of next year.

Lufthansa agreed to buy the Austrian state's 41.6% stake in Austrian Air, and to place a EUR4.49 a share takeover offer for the remaining shares last year, but the deal hinged on final approval by the commission.

Lufthansa said it will hold more than 90% of shares in Austrian Airlines through OeLH, or OesterreichischeLuftverkehrs Holding GmbH, after the extended acceptance period. OeLH will carry out all necessary steps to squeeze out the rest of the minority shareholders.

Austrian Airlines shareholders who offered their shares for sale by May 11 and didn't exercise the right to withdraw which was granted in the meantime, will be paid the offer price of EUR4.49 a share. In total, Lufthansa will pay a sum of about EUR166 million to the shareholders for the 36,959,414 shares.

The airline said all shareholders, who haven't yet accepted its offer have until Sept. 9 to offer their shares.

Company Web site: http://konzern.lufthansa.com

-By Kirsten Bienk, Dow Jones Newswires; [phone]; [e-mail]