Inside Track Korean Air’s Bid for Asiana Merger Clearance in the US
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - EU Clears Mega Merger with Conditions
The European Union has approved Korean Air's acquisition of a 35% stake in Asiana Airlines, subject to the implementation of remedies aimed at addressing potential competition concerns.
These conditions, which have not been fully disclosed, are expected to be similar to the commitments required by the US Department of Justice for the merger to proceed in the American market.
The clearance from both the EU and US regulators represents a significant milestone in the proposed merger between the two major South Korean airlines.
The European Union's clearance of the Korean Air-Asiana Airlines merger is subject to specific conditions aimed at addressing potential competition concerns in the aviation market.
Korean Air has offered remedies to the EU Commission to address these competition concerns, which were a key factor in the EU's approval of the transaction.
The approval from the EU is the latest milestone in the regulatory review process, with Korean Air having already obtained clearance from several other jurisdictions around the world.
The US Department of Justice has also cleared the proposed merger, subject to its own set of conditions to ensure fair competition in the US market.
The specific details of the remedies and conditions imposed by both the EU and the US have not been publicly disclosed, but they are expected to be similar in nature.
The clearance from the EU and the US represents a significant step forward for the proposed merger between Korean Air and Asiana Airlines, bringing the transaction one step closer to completion.
What else is in this post?
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - EU Clears Mega Merger with Conditions
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - T'way Air to Expand European Routes
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Cargo Division Sale Paves Way for Approval
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Employee Incentives Promised After Merger Completion
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Final Hurdle - US Antitrust Regulators' Decision
- Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Consolidation Nears Finish Line, Barring Surprises
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - T'way Air to Expand European Routes
T'way Air, South Korea's second-largest low-cost carrier, has been appointed by the European Commission as the solution provider for four overlapping passenger routes between Korea and the EU.
These routes will connect Seoul with Barcelona, Frankfurt, Paris, and Rome, and will be the only European flights offered by a Korean LCC.
The expansion into the European market is seen as a golden opportunity for T'way Air to bolster its international presence.
T'way Air, South Korea's second-largest low-cost carrier, sees the European routes awarded from the Korean Air-Asiana merger as a golden opportunity to significantly expand its international presence.
These new European routes, connecting Seoul to Barcelona, Frankfurt, Paris, and Rome, will be the only flights to Europe offered by a Korean low-cost carrier, and only the second such service from the Asia-Pacific region.
The European Commission has appointed T'way Air as the designated solution provider for the four overlapping passenger routes between Korea and the EU, as part of the remedies agreed upon to address competition concerns.
In return for the EU's approval of the Korean Air-Asiana merger, the combined entity has agreed to several conditions, including the sale of Asiana's entire air cargo business and the divestment of certain routes.
Korean Air has also offered to sell Asiana's entire freighter operation after the merger is completed, further addressing the EU's concerns about maintaining a competitive cargo market.
The European Commission's clearance of the merger is contingent on the establishment of a new airline that can serve the four overlapping passenger routes between Korea and the EU, a role that T'way Air has been tapped to fulfill.
Despite the remedies required by the EU and the US Department of Justice, the clearance from both regulatory bodies represents a significant milestone in the proposed merger between the two major South Korean airlines, bringing the transaction one step closer to completion.
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Cargo Division Sale Paves Way for Approval
Korean Air is selling Asiana Airlines' cargo business as a condition for the European Union's approval of the merger.
The sale of the cargo division, which accounts for nearly a quarter of Asiana's total sales, is seen as a crucial step in the merger approval process, as the EU's antitrust regulator will assess the eligibility of the buyers.
If the sale is approved, Korean Air will then need to receive final approval from the US Department of Justice and Japan to complete the merger.
The sale of Asiana Airlines' cargo business is a crucial condition for the European Union's approval of the merger with Korean Air.
This will ensure the combined entity does not dominate the air cargo market.
If approved, the merged Korean Air-Asiana entity would have an annual cargo revenue exceeding 10 trillion won ($5 billion), making it a powerhouse in the global air cargo industry.
The European Union's review of the merger took just over a year, indicating the complexity and scrutiny involved in assessing the potential impact on competition.
The cargo division being sold operates 11 aircraft, with 8 owned by Asiana and 3 leased, underscoring the significant asset base that will change hands.
Korean Air submitted proposed remedies to the EU authorities, demonstrating the company's proactive approach to addressing competition concerns and securing approval.
The merger's approval is contingent on receiving the green light from all three key jurisdictions - the EU, the US, and Japan - showcasing the global regulatory coordination required.
The sale of the cargo division is seen as a major step towards the merger's final approval, as the European Union will closely assess the eligibility and competitiveness of the potential buyer.
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Employee Incentives Promised After Merger Completion
As Korean Air continues its pursuit of merging with Asiana Airlines, the company has promised its employees a significant bonus of up to 50% of their annual incentives once the merger is finally approved.
This incentive is seen as a move to boost morale and retain key talent during the ongoing regulatory review process.
While the merger clearance in the US is still pending, Korean Air's president has emphasized the importance of completing the acquisition to build a stronger, more resilient aviation industry ecosystem in South Korea.
Korean Air has promised its employees a bonus of up to 50% of their annual incentives once the proposed merger with Asiana Airlines gains final approval, a significant incentive to keep employees motivated during the integration process.
The merger clearance in the US is still pending, with no exact timeline given for final approval, creating uncertainty for employees as they await the outcome.
Korean Air's president has emphasized the importance of completing the acquisition to build a healthy aviation industry ecosystem in the country, suggesting the merger is seen as crucial for the industry's long-term viability.
The airline has submitted a revised merger plan to the European Commission, which includes the sale of Asiana's cargo operation and the relinquishment of routes to European cities, indicating a willingness to make concessions to secure regulatory approval.
The investigation by the European Commission has 90 working days to take a decision on the merger, a relatively short timeframe that highlights the regulatory scrutiny the deal is facing.
Korean Air's CEO has expressed a willingness to make additional concessions to international regulators to ensure a smooth merger, demonstrating the company's commitment to addressing competition concerns.
If approved, the merger would see Asiana's assets absorbed into Korean Air, with the merged airline becoming a member of the SkyTeam alliance, potentially offering employees more opportunities for career development and international experience.
Korean Air has filed merger notifications to a total of 14 competition authorities and has received approval from 13 of them, suggesting a complex and global regulatory process.
The airline has emphasized the importance of completing the merger, with Chairman Cho Won-tae stating that the acquisition will help build a healthy aviation industry ecosystem across the nation, underscoring the strategic importance of the deal for the company and the industry.
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Final Hurdle - US Antitrust Regulators' Decision
US antitrust regulators are considering legal action to block Korean Air's proposed acquisition of Asiana Airlines, citing potential harm to competition in passenger and cargo air transport services.
The Department of Justice has expressed concern over the potential impact of the merger, leading them to delay a final decision, even as the airline's proposal has already received approval from several other competition authorities globally.
With discussions still ongoing, the exact timeline for a final decision on the Korean Air-Asiana merger remains unclear, as the US authorities weigh the potential consequences of this deal on the competitive landscape.
The US Department of Justice has expressed concern over the potential impact of the Korean Air-Asiana merger on the competitive landscape, leading them to delay a final decision on the deal.
The merger has already received approval from several other competition authorities globally, including South Korea and Japan, but is facing regulatory hurdles from US antitrust authorities.
The EU antitrust regulators have also opened an in-depth probe of the deal and are expected to make a decision by August 3,
Korean Air has pledged to sell Asiana's cargo unit to address competition concerns in the EU, a move that could help pave the way for the merger's approval in the United States.
Korean Air expects to receive a formal warning from EU antitrust regulators by the end of May 2024, indicating the close scrutiny the merger is receiving from European authorities.
The proposed merger, if approved, would create the 10th largest airline in the world by revenue, underscoring the significance of the deal for the industry.
The US Justice Department's consideration of legal action to block the merger highlights the department's commitment to preserving competition in the passenger and cargo air transport services.
The timeline for a final decision on the Korean Air-Asiana merger remains unclear, as discussions between the companies and US regulators are still ongoing.
The sale of Asiana's cargo unit is a crucial condition for the EU's approval of the merger, as the European Commission aims to ensure the combined entity does not dominate the air cargo market.
Korean Air's willingness to make concessions, such as the sale of Asiana's cargo business, demonstrates the company's proactive approach to addressing competition concerns and securing regulatory approval for the merger.
Inside Track Korean Air's Bid for Asiana Merger Clearance in the US - Consolidation Nears Finish Line, Barring Surprises
The proposed acquisition of Asiana Airlines by Korean Air is nearing completion, but faces potential obstacles from antitrust regulators in the US, as the Biden administration considers filing a lawsuit to block the deal.
While Korean Air is determined to push through with the merger, the process has already been delayed by two years due to regulatory reviews, and the airline expects the acquisition to be completed in 2024 if it can secure the necessary approvals.
The merger between Korean Air and Asiana Airlines, if approved, would create the world's 10th largest airline by revenue, underscoring the global significance of this consolidation.
Korean Air has promised its employees a bonus of up to 50% of their annual incentives once the merger is finally approved, a move to boost morale and retain key talent during the ongoing regulatory review process.
The European Union has appointed South Korean low-cost carrier T'way Air as the solution provider for four overlapping passenger routes between Korea and the EU, paving the way for increased competition in the region.
Korean Air has offered to sell Asiana's entire cargo business as a condition for the European Union's approval of the merger, addressing the EU's concerns about the combined entity's dominance in the air cargo market.
The US Department of Justice has expressed concerns about the potential impact of the merger on competition in passenger and cargo air transport services, leading them to delay a final decision on the deal.
The merger has already received clearance from several other competition authorities globally, including South Korea and Japan, but is still facing regulatory hurdles from the US antitrust authorities.
Korean Air has filed merger notifications to a total of 14 competition authorities and has received approval from 13 of them, showcasing the complex and global regulatory process involved.
The European Commission's investigation of the merger has a 90-working-day timeline, a relatively short timeframe that highlights the regulatory scrutiny the deal is facing.
Korean Air's CEO has emphasized the importance of completing the acquisition to build a healthy aviation industry ecosystem in South Korea, suggesting the merger is seen as crucial for the industry's long-term viability.
The proposed acquisition of Asiana Airlines by Korean Air would see the merged airline become a member of the SkyTeam alliance, potentially offering employees more opportunities for career development and international experience.
If approved, the merger would result in the combined entity having an annual cargo revenue exceeding 10 trillion won ($5 billion), making it a major player in the global air cargo industry.