Korean Air Completes Acquisition of Asiana Airlines After Four-Year Saga
Seoul, December 11, 2024 – Korean Air, South Korea’s flag carrier, today finalized its acquisition of Asiana Airlines, marking the end of a protracted four-year merger process. The companyannounced the completion of a payment of 131,578,947 shares, fulfilling its commitment in Asiana Airlines’ rights offering.This transaction concludes a complex deal that has faced significant regulatory hurdles.
The total acquisition cost amounted to 1.5 trillion Korean won (approximately 76.3 billion Chinese Yuan or $10.5 billion USD). KoreanAir initially paid a 300 billion won deposit in December 2020, followed by a 400 billion won interim payment in March 2021. Today’s payment of approximately 800 billion won represents the final installment. This acquisition grants Korean Air a 63.9% stake in Asiana Airlines, solidifying its position as the majority shareholder.
The merger faced a lengthy regulatory review process. In 2021, Korean Air submitted merger applications to competition authorities in 14 countries and regions. While approvals were secured from 13 jurisdictions, the process was significantly delayed by the United States Department of Justice (DOJ). The DOJ’s concerns, centered on potential anti-competitive practices resulting from the merger of two major airlines, ultimately required extensive negotiations and concessions from Korean Airto secure final approval (further details on the DOJ’s concerns and Korean Air’s concessions are pending release and will be included in a future update).
This acquisition has significant implications for the South Korean aviation industry. The combined entity will create a significantly larger airline, potentially leading to increased market share, enhanced operationalefficiencies, and expanded global reach. However, concerns remain regarding potential impacts on competition and airfares for consumers. Further analysis is needed to fully assess the long-term effects of this merger on the industry and passengers. The integration of the two airlines’ operations will also be a major undertaking, requiring careful planningand execution to ensure a smooth transition and minimize disruption to services.
The successful completion of this merger represents a significant milestone for Korean Air, but the challenges of integration and navigating the evolving global aviation landscape remain. Further reporting will follow as the two airlines begin the process of combining their operations and strategies.
References:
- Yonhap News Agency. (December 11, 2024). Korean Air completes acquisition of Asiana Airlines. [Link to Yonhap News Agency article in Korean and English, if available. Otherwise, specify source and date accessed].
(Note: Financial figures are approximateand may vary slightly depending on the exchange rate used. Further details regarding the DOJ’s objections and the resolution will be added once publicly available.)
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