By Foo Yun Chee
BRUSSELS (Reuters) -Korean Air won EU antitrust approval on Tuesday to buy Asiana Airlines after the companies agreed to sell the latter’s cargo unit and divest routes to four European cities to a rival.
Korean Air, South Korea’s biggest carrier, announced in late 2020 its 1.8-trillion-won ($1.35 billion) bid to become the top shareholder of indebted Asiana.
The airline sector has seen a wave of consolidation in recent months, with Lufthansa seeking a 41% stake in Italy’s ITA Airways and British Airways and Iberia owner IAG’s bid for the remaining 80% of Spanish carrier Air Europa it does not already own.
“With the EC approval secured, Korean Air continues to be focused on its discussions with the U.S. competition authority to finalise the overall merger review processes as soon as possible,” Korean Air said in a statement.
Korean Air said it has so far obtained or completed a review process with 13 of the 14 regulatory authorities requiring business combination approvals.
The European Commission said remedies offered by the two Korean carriers addressed competition concerns, confirming a Reuters story. The concessions could set the benchmark for other airline mergers.
The EU competition enforcer said Korean Air will divest Asiana’s global cargo freighter business and also offer slots, traffic rights and aircraft to Korean budget rival T’Way for routes to Barcelona, Paris, Rome and Frankfurt.
The deal can only be implemented once the Commission has approved the buyer for the cargo business and also conditional on T’Way starting operations on the four routes.
“These remedies effectively address our concerns, and will ensure fair competition and consumer choice in this vital sector,” EU antitrust chief Margrethe Vestager said in a statement.
($1 = 1,330.5100 won)
(Reporting by Foo Yun Chee in Brussels; Additional reporting by Heekyong Yang in Seoul; Editing by Susan Fenton)
