Talks Underway for Review of Acquisition Terms
HDC Hyundai Development has received approval from Russian authorities for its acquisition of Asiana Airlines Inc.
"We have been informed by Russian authorities that the process of the business combination has been completed, and consultations are underway regarding a re-examination of the acquisition conditions," HDC Hyundai Development said on July 3
HDC Hyundai Development promoted the acquisition of Asiana Airlines in cooperation with Mirae Asset Daewoo and signed a contract for stock trade and the acquisition of new shares with Kumho Industrial and Asiana Airlines, respectively in December 2019 and is in the process of taking over Asiana Airlines. Since January, it has been in the process of receiving approval for the business combination from the Korea Fair Trade Commission and related authorities in the United States, China, Russia, Turkey and Kazakhstan.
HDC Hyundai Development forecast that the M&A deal depends on the implementation of the preceding conditions, although the process of securing approval for the business combination has been completed.
"The deal would be concluded only when the statements and guarantees of both Kumho Industrial Co. and Asiana Airlines Inc. are proven true, and other prerequisites are met at the same time, including the fulfilling of important promises and obligations," HDC Hyundai Development said.
HDC Hyundai Development asked creditors to re-examine the acquisition conditions as circumstances have taken place since the contract signing that caused a significant negative impact on Asiana Airlines' acquisition or significantly undermined the value of the airline. Currently, talks are underway on the matter between creditors and HDC Hyundai Development.
Meanwhile, Minister of Land, Infrastructure and Transport Kim Hyun-mi held an emergency meeting with executives of the airlines currently in M&A talks and called for efforts to ensure that M&A deals are carried out as planned.
Kim met with Chung Mong-kyu, chairman of HDC Hyundai Development, Chae Hyung-suk, vice chairman of AK Group, the parent company of Jeju Air, and lawmaker Lee Sang-jik, founder of Eastar. Jeju Air is interested in taking over Eastar, but M&A talks have been stalled following the outbreak of COVID-19.