(Bloomberg) -- Deutsche Lufthansa AG could walk away from its plan to buy the Italian carrier ITA Airways, successor to Alitalia, due to the severity of demands from the European Union surrounding the deal, la Repubblica reported. 

Lufthansa executives recently told European Commission officials in Brussels that it was ready to abandon the buyout if the costs of antitrust remedy requests are higher than the benefits of doing the deal, the Italian daily wrote. It cited a senior official with Italy’s government who wasn’t identified.

Lufthansa’s €325 million ($352 million) investment is being held up by an in-depth investigation from EU deal watchdogs, amid concerns over competition on both short- and long-haul routes.

The commission is preparing to issue a so-called statement of objections cataloging certain risks that would arise from the deal, Bloomberg News reported last month. 

Under the original terms of the rescue plan, Cologne-based Lufthansa would initially buy 41% of ITA, successor to failed flagship carrier Alitalia, from the Italian state, with an option to acquire the rest later. 

The transaction marks the latest attempt to resurrect the ailing Italian airline, which officially ceased operations in 2021.

An EU ruling on the deal could be delayed to December from early June, la Repubblica said.

Read more: Italy’s Giorgetti Worried About EU Hold Up of ITA Stake Sale

The privatization is part of a wider government plan to sell about €20 billion in state-held stakes by 2026 to help cut Italy’s mammoth debt load. While the country’s deficit is on a downward path, its debt remains stuck at about 140% of economic output.

(Updates with detail on Italy’s privitization plans in final paragraph.)

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