Korean Air wins 1st approval for Asiana acquisition

SEOUL, Feb. 10 (Yonhap) -- Korean Air Lines Co., South Korea's biggest carrier, said Wednesday it has obtained its first overseas approval for its planned acquisition of smaller rival Asiana Airlines Inc.

Korean Air received the first approval from Turkey last week after it submitted documents last month to antitrust authorities in eight countries and the European Union to proceed with the deal to acquire Asiana to compete with global carriers, a company spokeswoman said over the phone.

The eight countries are South Korea, the United States, China, Japan, Turkey, Vietnam, Taiwan and Thailand.

"We expect no major difficulties in receiving approval from the remaining eight countries for the merger of the two airlines, given that bigger merger deals went smoothly in the past," she said.

Korean Air and Asiana account for a combined 40 percent of passenger and cargo slots at Incheon International Airport, South Korea's main gateway. It does not constitute a monopoly, the company said.

The company also plans to submit related documents to five countries -- Britain, Australia, Malaysia, Singapore and the Philippines -- to report the integration, though it is not for approval.

Korean Air plans to sell 3.3 trillion won (US$3 billion) worth of new stocks to finance the acquisition of debt-laden Asiana and spend 1.5 trillion won of the proceeds for the acquisition.

The national flag carrier has recently finished conducting due diligence on Asiana since December to look into Asiana's cost structure, contracts and other details, as it is scheduled to come up with a post-merger integration plan by March 17.

The two airlines have suspended most of their flights on international routes since March as countries strengthened their entry restrictions to stem the spread of the pandemic.

Korean Air's net losses narrowed to 291.45 billion won ($260 million) in 2020 from 622.76 billion won a year earlier as it focused on winning more cargo delivery deals to offset the pandemic-caused slump in travel demand.

Asiana has yet to release its earnings results for 2020.

kyongae.choi@yna.co.kr
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