M & A blockbuster 2020: Korean Air acquires Asiana Airlines for $ 1.6 billion
Korean Air said it would buy Asiana Airlines under a contract worth $ 1.6 billion. The deal includes Asiana’s subsidiaries Air Seoul and Air Busan.
|Aircraft of the national airline Korean Air. Source: Yonhap|
South Korean airline Korean Air announced it would acquire a smaller rival Asiana Airlines, which is currently struggling, with the aim of strengthening the domestic aviation industry amid a heavy impact of the acute respiratory inflammatory disease crisis COVID-19.
In a statement dated November 16, Korean Air said it would buy Asiana Airlines in a contract worth $ 1.6 billion. The deal includes Asiana’s subsidiaries including low-cost airline Air Seoul and Air Busan. After this deal is completed, Korea Air will become one of the top 10 airlines in the world.
However, the problem with Korean Air, like many airlines in the world today, is financial. Korean Air confirmed that if the COVID-19 epidemic continues, Korean Airlines’ financial situation may be in danger. The airline can restructure the domestic aviation market to promote competition and minimize support from the state budget.
Asiana Airlines has long had financial problems, prompting the owner of Kumbo Industrial to sell a 31% stake last year due to pressure from creditors.
Korean construction contractor HDC Hyundai Developer once wanted to acquire Asiana Airlines in September, but failed because the COVID-19 pandemic “strangled” aviation activities due to travel restrictions and border blockade. aviation of many countries. In 2020, Asiana announced an operating loss of 268 billion won in the first six months of 2020, while the company’s debt was topped 11,500 billion won.