Korean Air has signed a “basic business sale agreement” with Air Incheon for the Asiana Airlines cargo business.
The agreement follows June’s announcement that Air Incheon had been named as the preferred bidder for the unit as part of Korean’s acquisition of Asiana.
“The transaction amount of this cargo sale transaction is W470 billion ($342 million),” said Korean in a regulatory filing on 7 August.
The company said that the sale could be concluded within six months of the closing date of the stock acquisition transaction.
Korean added that the signed agreement covers 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 coronavirus pandemic and the resulting disruption in the airline industry.
Last year the plan raised concerns with the European Commission. It said the takeover would reduce competition because the two carriers dominate the long-haul market between Europe and 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’s 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 after the two airlines resubmitted their plans to EU antitrust regulators.
In January, Korean said that it expects to complete the acquisition of Asiana 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.
This story originally appeared on Air Cargo News
