Korean Air, and their parent company Hanjin KAL, will acquire Asiana Airlines, with the takeover bid totalling KRW1.8 trillion ($1.62 billion).
The takeover is intended to “stabilize the Korean aviation industry” and enhance its competitiveness in a fragile post-COVID market. Korean Air says that the merger will result in “more streamlined route operations and lower costs”.
Korean Air will purchase newly-issued Asiana shares worth KRW1.5 trillion ($1.35 billion). Additionally they will also purchase Asiana bonds, worth about KRW300 billion ($270 million).
Hanjin KAL will receive a KRW800 billion ($722 million) investment from the state-owned Korea Development Bank. The reason for the bank’s investment in Korean Air, through Hanjin KAL, is “to ensure Hanjin KAL maintains its status as the airline’s holding company”.
“Korean Air decided to acquire Asiana Airlines after much consideration and deliberation in order to pursue its founding mission to contribute to [Korea] through transportation. Following its mission, the carrier will ensure job security for employees at both airlines…”
Hanjin KAL
Once Korean Air completes their acquisition of Asiana Airlines, the airline is expected to be ranked as “one of the top 10 airlines in the world”.
Furthermore, Korean Air’s acquisition, along with the expansion of Asiana’s routes, fleet and capacity, will “give the airline the competitiveness to compete with global mega airlines”.