Korean Air has today signed a "basic business sale agreement" with Air Incheon for Asiana Airlines' cargo business.
The agreement follows June's announcement that Air Incheon had been named as the preferred bidder for the sale of Asiana's cargo business as part of Korean Air’s acquisition of Asiana Airlines.
"The transaction amount of this cargo sale transaction is KRW 470 billion (approximately $342m)," said Korean Air in a regulatory filing on August 7.
The company said in the filing on electronic disclosure system DART (Repository of Korea's Corporate Filings) that the sale could be concluded within six months of the closing date of the stock acquisition transaction.
Korean added that the signed agreement covered matters including the structure, schedule and conditions of the sale.
Asiana’s cargo business is being sold in order for Korean to secure regulatory approval to acquire Asiana. The agreement is still subject to review by the European Commission.
Korean first announced its plan to acquire Asiana in November 2020, but the acquisition proceedings were delayed by the Covid pandemic and resulting disruption in the airline industry.
Then last year, the plan sparked concern by the European Commission, which said the takeover would result in reduced competition between Europe and South Korea because the two carriers dominate the long-haul market to and from South Korea. Korean also struggled to gain approval for the deal in Japan and the US.
To secure regulatory approval from Brussels for the move, Korean offered to sell Asiana Airlines’ cargo business in October 2023.
In December, European Union competition regulators set a February 2024 deadline to review Korean Air’s proposed acquisition of Asiana Airlines after the two airlines resubmitted their plans to EU antitrust regulators.
Korean Air said in January that it expects to complete the acquisition of Asiana Airlines this year.
Recent media reports suggest that logistics firm Hyundai Glovis is interested in investing in a consortium led by Air Incheon for the acquisition Asiana's cargo business.
