Italy govt approves Alitalia-Air France-KLM deal

ROME, March 17 Mon Mar 17, 2008 4:16pm EDT

ROME, March 17 (Reuters) - Italy's government has approved Alitalia's AZPIa.MI deal to be acquired by larger rival Air France-KLM (AIRF.PA) in a bid to avert bankruptcy, a statement from the Italian cabinet said on Monday.

Air France-KLM offered one share for every 160 shares of Alitalia, valuing its stock at 0.10 euro a share, or 138 million euros ($183.8 million) in all -- an 81 percent discount to the record low price at Friday's close.

Air France-KLM has said it wants the approval of Italy's next government to be elected in April and Alitalia's strike-prone unions before concluding the deal.

(Reporting by Deepa Babington)