Sometimes good things come to those that wait. And for China Eastern Airlines (CEA) – if it can wait just a little bit longer – it may be able to acquire its hometown rival Shanghai Airlines via a share swap. CEA said it would raise US$1.02 billion through a private placement to finance the merger and then swap 1.3 of its Shanghai-listed A shares for every Shanghai Airlines A share. Not bad if you’re a Shanghai Airlines shareholder – you’d walk away with a 25% price premium. Beijing will be happy as well; the acquisition would be another step toward its goal of consolidating of the country’s inefficient airline sectpr. Another good deal today involves the Industrial Commercial Bank of China (ICBC) and Airbus. ICBC is providing US$3 billion in aircraft financing and leasing support to Airbus customers who wish to purchase planes produced at the Airbus Tianjin plant, so they won’t have to wait until they’ve saved tens of billions of dollars before they can buy or lease aircraft. The agreement includes the structuring of operating and finance lease transactions and portfolio management, and the remarketing of aircraft when they return from lease.
Another policy goal is reducing smoking. Beijing has been very patient with China’s 350 million smokers, hoping that warning labels and cancer statistics would do the trick. But it seems like the government is finally starting to adopt stronger measures. To that end, Beijing will raise the country’s cigarette taxes. Taxes on higher-priced cigarettes will increase from 45% to 56%, while those on lower-end brands will rise from 30% to 36%. However, these taxes are being place on retailers and it is their choice whether they pass the cost onto consumers.