Aerolíneas Argentinas S.A. | The Path to Privatization in the 1980s
The Path to Privatization in the 1980s
The disastrous Falklands War in April 1982 did not help Argentina's economy, which fell apart in the mid-1970s during Isobel Perón's rule. Inflation reached triple or quadruple digits, depending upon the estimate, and in 1986 the government of Argentina planned for the privatization of several large companies in order to satisfy its creditors. AR was to be one of the first.
In February 1988, the Directory of Public Enterprises (DEP) announced the sale of 40 percent of AR to SAS for $204 million. Cielos del Sur, which owned Austral, itself privatized in 1987, put forth an informal but well publicized counteroffer with the support of Swissair and Alitalia. SAS withdrew its bid in December 1988 after a highly politicized debate pitting President Raul Alfonsín against incumbent Carlos Menem. The Cielos del Sur group was not able to finalize its bid, however, due to a lack of financial disclosures from the government. Then,...
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