South Korea’s flag carrier Korean Air said Thursday it had bought a majority stake in rival Asiana Airlines for $1 billion, making it the effective owner four years after first expressing its takeover intentions.
With the acquisition of a 63.88 percent stake, Korean Air said it had invested 1.5 trillion won in the merger, “making Asiana Airlines a subsidiary” of the company.
The move will create Asia’s second-biggest airline group based on capacity, after Singapore Air, and the 10th-largest globally, according to Bloomberg News.
The final phase of the tie-up follows the European Union’s approval in February, granted on the condition that the flag carrier divests Asiana’s global cargo freighter business as part of antitrust measures.
The European Commission, the bloc’s powerful antitrust authority, last year expressed concerns the takeover could restrict competition on routes between Europe and South Korea.
With Asiana Airlines as its subsidiary, Korean Air will “strengthen the national aviation industry’s competitiveness, enhance Incheon Airport’s hub capabilities, and expand its global network reach”, the airline said in a press release.
