To address EU antitrust concerns, Asiana Airlines (020560. KS) announced on Tuesday that it will hold another board meeting in early November to consider accepting a merger proposal from Korean Air that involves selling its cargo business.
During a meeting on Monday, the board of Asiana could not decide whether to accept the offer from Korean Air Lines (003490. KS).
Asiana creditors have been searching for a new owner of the heavily indebted carrier for several years, including state-run lender Korea Development Bank. In 2020, during the COVID-19 pandemic, Asiana was acquired by Korean Air, a competing airline in the area.
The European Union, the United States, and Japan must still approve Korean Air’s acquisition plan.
Asiana said, “The board meeting that is currently in recess will resume in early November and make a final decision.”
The largest airline in South Korea, Korean Air, had intended to submit a corrective action plan to the European Commission by the end of October to receive EU clearance. However, due to an upcoming decision by Asiana’s board, that timeframe is no longer feasible.
“By the end of October, we cannot file the remedies. In a statement to Reuters, Korean Air stated that it will follow Asiana Airlines’ board of directors’ decision when determining the new remedy submission deadline.
In Tuesday midday trade, Asiana’s share price recovered some of its earlier losses, rising as high as 14.2%, while Korean Air Lines saw a 2.5% increase. The KS11 benchmark price index had a 1.3% decrease.
The increase in the price of Asiana’s shares, which had fluctuated recently, suggests that investors appear to be more comfortable about the outcome of the merger transaction, according to Choi Gowoon, an analyst at Korea Investment & Securities.
Comment Template