Swissair in talks to sell Gate Gourmet

The Texas Pacific Group has set its sights on Gate Gourmet Keystone Archive

The Swissair Group has signed a preliminary agreement to sell its airline catering company, Gate Gourmet, to the private United States equity firm, Texas Pacific Group.

Swissair announced it had signed a memorandum of understanding on the sale but did not announce a figure for the deal, which is expected to be completed in the first quarter.

It said in a statement that “a considerable number” of investors had expressed interest in acquiring the company.

Swissair, which collapsed last year after announcing a loss of SFr2.9 billion ($1.7 billion) for 2000 and in the aftermath of the terrorist attacks in September in the US, said an announcement would be made in due course.

What remains of Swissair flight operations is to be incorporated into the operations of regional carrier Crossair in a new airline to be launched officially on April 1 under the name “swiss”.

Selling assets

Swissair, which has been operating under court-ordered bankruptcy protection since October, is in the process of selling off a number of assets.

It has also been trying to sell Nuance, the world’s largest airport retailing operation, but has so far failed to secure an offer.

Gate Gourmet is the world’s second-largest airline catering business, with a turnover of about SFr3.2 billion last year. Its customer base includes all major airlines.

It serves more than 300 million passengers per year, employs some 26,000 staff and operates 152 kitchens in 33 countries.

Pressure on transport companies

Observers have commented that if the Gate Gourmet acquisition is completed, it will typify the next generation of transport deals. Globalisation and rapid technological development are said to be putting increasing pressure on transport companies to spin off non-core assets.

The Texas Pacific Group, with bases in Texas, San Francisco, was founded in 1993. It is a private investment partnership with capital of more than $8 billion dollars.

The group was an early investor in the airline industry and led the turnarounds of both Continental Airlines and America West.

The partnership has also made a major investments across the US and Europe in a broad range of industries, including consumers services and products, luxury goods, technology and healthcare services.

The group acquired the Swiss shoe and accessories company Bally in 1999.

swissinfo with agencies