Air China will buy a 13% stake in Cathay Pacific Airways from Chinese conglomerate CITIC Pacific for US$761 million, bringing the mainland carrier’s stake in Cathay to nearly 30% from the current 17.5%, the Wall Street Journal reported. Hong Kong conglomerate Swire Pacific will purchase an additional 2% stake in Cathay for US$130.3 million, increasing its holdings to 42% from 40%. Both Swire and Air China paid US$1.66 per share, a 10.8% premium to Cathay’s Friday closing price of US$1.50. A larger stake in Cathay, the owner of Hong Kong-based airline Dragonair, will give Air China greater access to the important hub of Hong Kong and will also bolster Cathay Pacific at a time when premium travel and cargo traffic has shrunk due to the economic crisis. Trading in Cathay Pacific, CITIC Pacific, and Air China shares was halted Monday.
You must log in to post a comment.
Yes, I would like to receive emails from China Economic Review. (You can unsubscribe anytime)
Copyright © 2018 SinoMedia Group Limited All rights reserved