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UPDATE 1-No deal reached for Certares/ITA Airways as deadline passes

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ROME, Oct 31 (Reuters) - Italy’s Economy Ministry said on Monday it would not renew an exclusivity period for talks with U.S. private equity fund Certares, Air France-KLM and Delta for the sale of ITA Airways, the nationalised successor airline to Alitalia.

“Exclusivity obligations granted on Aug. 31 ... end today,” the ministry said in a statement, adding that contacts would continue over “a possible sale agreement” with the potential buyers.

The consortium beat a rival bid presented by shipping group MSC and Germany’s Lufthansa for the chance to buy control of Alitalia’s successor.

Certares has been discussing taking a majority stake, while Air France-KLM and Delta would initially be only commercial and operational partners.

The deal has been complicated by a national election in Italy that resulted in the formation of a new right-wing government that was sworn into office earlier in October.

The board of ITA Airways this month also

stripped

Executive Chairman Alfredo Altavilla of his powers, giving Chief Executive Fabio Lazzerini the task of negotiating the sale. (Reporting by Alvise Armellini Editing by Keith Weir)

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