What do you guys think of this?
Air China Set To Buy HK Cathay Pacific Airlines - Report
DOW JONES NEWSWIRES
March 15, 2005 6:49 p.m.
HONG KONG -- Air China Ltd. (0753.HK) is in talks with conglomerate Swire Pacific Ltd. (0019.HK) that could see the Chinese carrier take over Swire's 45% owned Cathay Pacific Airways Ltd. (0293.HK), the South China Morning Post reports.
Citing a senior Swire executive, the newspaper said Swire is in advanced negotiations that would see Cathay take over its rival Dragonair before being itself subsumed into the Air China Group.
Cathay is Hong Kong's de facto flag carrier, while Dragonair is a Hong Kong-based regional airline that's partly owned by Cathay and Swire.
The newspaper said if Hong Kong-listed Swire accepts Air China shares in return for its stake in Cathay , it would be the single largest shareholder in the mainland carrier and place its mainly British executives at the core of the Chinese airline's operations
The paper also citing "informed sources in the affected companies" said a deal would likely be announced in two weeks.
The newspaper said that talks over a crossholding structure between Air China and Cathay began in the middle of last year, when the mainland carrier first set a date to list in Hong Kong.
In November, Cathay paid about HK$2.91 billion for 10% in Air China, which listed in Hong Kong on Dec. 15.
Carolyn Leung, a Cathay Pacific spokeswoman, declined to comment. "We don't comment on market rumors," she said.
Any deal will require consent from multiple shareholders at the listed firms that potentially have divergent interests. Dragonair is controlled by China National Aviation Co. (1110.HK), while Chinese conglomerate CITIC Pacific Ltd. (0267.HK) has stakes in both airlines.
But a deal would be a boon for Cathay , which only won the right to fly to China a couple years ago after an absence of more than 10 years. Cathay resumed passenger services to Beijing in December 2003 after a 13-year hiatus in the mainland, and it now operates daily services to the capital. The airline early this year launched passenger services to Xiamen and a freighter service to Shanghai.
-By Nisha Gopalan, Dow Jones Newswires; 852-2832-2343;
[email protected]
Here\'s more...
Wednesday March 16, 12:10 AM
Air China eyes Cathay, Dragonair buyout - report
HONG KONG, March 16 (Reuters) - Flag carrier Air China Ltd. may take over Cathay Pacific Airways Ltd. as part of a consolidation of Hong Kong\'s two main airlines in a deal which would create the world\'s largest airline, a Hong Kong newspaper said on Wednesday.
The South China Morning Post said British-linked Swire Pacific Ltd. , one of Hong Kong\'s oldest trading houses, was in advanced negotiations that would see Cathay take over rival Dragonair before being subsumed itself into the Air China group, creating an aviation powerhouse.
Citing sources in the affected companies, the newspaper said Swire may accept Air China shares in return for its 45.73-percent stake in Cathay, a move that would make it a single largest shareholder in the mainland carrier and place its executives at the core of the new group\'s operations.
The paper quoted a senior executive at Swire as saying that Cathay\'s 10 percent investment in Air China in November was the first step in cementing a relationship.
Sources suggested that a deal could be announced within two weeks.
A Cathay spokeswoman in Hong Kong declined to comment on report.
The Hong Kong Economic Times reported Cathay was also in talks with China-focused conglomerate CITIC Pacific , which holds 26 percent of Cathay, and Dragonair\'s main stakeholder China National Aviation Corp. .
A consolidation of the three carriers would create the world\'s largest airline by market value which could feed an international customer base into Greater China\'s most comprehensive route network, the Post added.
Shares of Cathay have gained 1.05 percent in the past month to end at HK$14.30 on Tuesday while Air China has edged up 0.87 percent in the past month to HK$2.825.
Swire\'s shares have risen 4.4 percent over the past month to end at HK$65 on Tuesday.
(US$=HK$7.8)