China Eastern Airlines has announced an offer worth US$1.3 billion to merge with Shanghai Airlines, Bloomberg reported. China Eastern will exchange 1.3 new Shanghai-listed shares for each share of Shanghai Airlines. The deal, which is supported by both the government and Shanghai Airlines’ board, represents a 17% premium on the June 5 closing share prices of RMB5.33 (US$0.78) for China Eastern and RMB5.92 (US$0.87) for Shanghai Airlines. Trading of shares in both companies had been suspended, but will resume today. The acquisition is expected to boost China Eastern’s share of Shanghai’s air travel market to more than 50%, as well as giving it a larger fleet than China’s second-largest carrier, Air China. The central government earlier bailed out both Shanghai Airlines and China Eastern following combined losses of US$2.41 billion in 2008. China Eastern will also raise US$1.02 billion by selling new shares in Shanghai and Hong Kong.
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