Jeju Air Files Corporate Merger Review Application for Eastar Air with Fair Trade Commission... "Seeking Swift Acquisition"

[Image source=Yonhap News]

[Asia Economy Reporter Choi Saeng-hye] Jeju Air has begun administrative procedures for acquisition, including applying for a corporate merger review with Eastar Jet.

Jeju Air announced on the 15th that it submitted an application for a corporate merger review with Eastar Jet to the Korea Fair Trade Commission (KFTC) on the 13th.

Accordingly, the KFTC will evaluate the potential restriction of competition. The KFTC is required to review the corporate merger within 30 days and notify the results. If necessary, the review period can be extended up to 90 days, allowing a maximum of 120 days for the review.

Jeju Air expects the KFTC’s corporate merger review to be completed early to swiftly conclude the acquisition deal, as Jeju Air has made a difficult decision for the long-term development of the aviation industry amid the challenges all airlines face due to the recent COVID-19 pandemic. Jeju Air also plans to apply for corporate merger reviews soon in overseas markets such as Thailand and Vietnam, where competition restriction evaluations are required.

Jeju Air plans to acquire management rights by purchasing Eastar Jet shares after paying the remaining balance once the KFTC’s corporate merger review is completed, and will directly engage in normalizing Eastar Jet’s management.

Earlier, on the 2nd, Jeju Air held a board meeting and disclosed that it signed a stock purchase agreement (SPA) with Eastar Holdings, the largest shareholder of Eastar Jet, to acquire management rights of Eastar Jet for 54.5 billion KRW. At the time of signing the SPA, Jeju Air announced plans for Eastar Jet’s management normalization, including improving financial structure, maximizing operational efficiency, and establishing a safe flight system.

Jeju Air stated that until the acquisition process is completed, it does not have the legal qualification to intervene in Eastar Jet’s management, so Eastar Jet’s management team is expected to resolve the current management difficulties under their responsibility until the final acquisition.

A Jeju Air official said, "Jeju Air will do its best to maximize synergy between the two companies," adding, "We hope for swift and active cooperation from related government agencies to quickly resolve Eastar Jet’s management difficulties and overcome the crisis in the aviation industry."