Auction set to begin to sell Asiana’s cargo division

SEOUL, The auction to sell Asiana Airlines Inc.’s cargo business division is set to begin Tuesday following the European Union’s antitrust regulator’s conditional approval of Korean Air Co.’s planned merger with Asiana, industry sources have said.

The European Commission (EC), the executive body of the EU, gave a conditional nod to the 1.8 trillion-won (US$1.4 billion) merger deal that was announced in 2020 after reviewing the merger plan submitted by Korean Air.

The national flag carrier had proposed to sell Asiana’s cargo business and other remedial measures to win the EC’s approval.

UBS, which oversees the deal, has recently distributed an information memorandum and non-disclosure agreements to companies interested in acquiring the cargo division, an airline official told Yonhap News Agency.

UBS is likely to deliver bid proposals to potential buyers by Wednesday as it wants them to submit their fundraising and post-acquisition business plans by the end of this month, the official said.

Potential buye
rs reportedly include low-cost carriers, such as Jeju Air Co., Eastar Jet Co., Air Premia Inc. and cargo-focused Air Incheon.

Jeju Air and Eastar declined to comment. Air Premia and Air Incheon said they have an interest in acquiring the cargo division for expansion.

Korean Air aims to select the buyer of the cargo business before October. The approval by the EC of the selected buyer is also required to complete the merger plan.

Asiana has 11 cargo planes, including three chartered ones, and earned 1.6 trillion won (US$1.2 billion), 25 percent of its overall sales, in the division last year.

The cargo division is estimated to be sold for 500 billion won to 700 billion won in the markets.

In 2021, Korean Air submitted documents to antitrust regulators in 14 countries to review its integration with Asiana.

The company has received approval from 13 countries and regions, including the conditional one from the EU, and is waiting for approval from the United States.

Source: Yonhap News Agency