The Austrian Takeover Commission Friday said has granted a one-month extension of German airline Deutsche Lufthansa AG's (LHA.XE) public takeover offer Austrian Airlines AG (AUA.VI), saving the deal from a collapse.

The offer, which was due to expire Friday, has now been extended to Aug. 31, the takeover commission said in a statement.

The extension was needed to buy more time for Lufthansa and the European Commission to reach a compromise over competition concerns that would pave the way for antitrust clearance - a prerequisite for the offer.

Austrian Airlines' remaining undecided shareholders gained more time with the commission's decision Friday. Under the revised offer, the deadline for voluntary acceptance of the EUR4.49 a share public bid has been pushed back eight business days, from the initial deadline of Aug. 14, the takeover commission said.

The takeover commission's decision was viewed largely as a formality, and the share price of Austrian Airlines Friday was unchanged. At 0848 GMT, the stock traded flat at EUR4.38 while the Vienna ATX 20 index traded up 0.1%.

Lufthansa had applied for the extension July 28 as it became clear that the July 31 offer deadline for antitrust approval could not be met. It said at the time an agreement with the European Commission over antitrust approval "is emerging," but also that clearance for the takeover as well as for EUR500 million in government aid for Austrian Airlines couldn't happen in the existing time frame.

The Austrian Takeover Commission said its decision to grant an extension was made in the interest of Austrian Airlines' shareholders.

State-controlled Austrian Airlines is being sold after declining passenger volumes and steep fuel costs sent it deep into the red and a standalone solution was deemed unviable by both its owners and management.

In a head-to-head final bidding round, Lufthansa won the tender for the state's controlling 41.6% stake ahead of French-Dutch airline Air France-KLM (AF.FR).

Should the takeover fail, it would cost the Austrian state more than EUR1 billion to restructure, reshape and relaunch a smaller and viable Austrian Airlines, the company's supervisory board chairman said recently.

Company Web sites: www.takeover.at; www.austrianairlines.co.at; www.lufthansa.com

-By Flemming E. Hansen, Dow Jones Newswires; +43 1 513 69 22 10; flemming.hansen@dowjones.com