[Featured Stocks] 'Merger Completed After 4 Years' Korean Air and Asiana Airlines Both Show Weakness

Korean Air and Asiana Airlines, which have completed their merger after four years, are both showing weakness in the early trading session.

As of 9:10 a.m. on the 29th, Korean Air is trading at 24,300 KRW, down 1,150 KRW (4.52%) from the previous day. It initially rose to 26,000 KRW, marking a 52-week high, before turning downward. Asiana Airlines recorded a decline of 230 KRW (2.09%) to 10,760 KRW. Asiana Airlines also started higher but turned to a downward trend.

The European Commission (EC) and the U.S. Department of Justice (DOJ) have finally approved the corporate merger of Korean Air and Asiana Airlines, concluding the four-year-long merger of the two major airlines. The previous day, Korean Air announced that it had met all the preconditions for the EC's conditional approval of the merger. The EC announced that all preconditions for the merger had been fulfilled and that the review was concluded.

As previously disclosed, Korean Air plans to complete the transaction by paying the remaining 800 billion KRW out of the total 1.5 trillion KRW for the subscription of new shares in Asiana Airlines (excluding 300 billion KRW in perpetual bonds) by the 20th of next month. Afterward, Asiana Airlines will become a subsidiary with a 63.88% stake held by Korean Air. About two years later, the two companies are expected to be fully integrated and operated as one.

Myung Ji-woon, a researcher at Shinhan Investment Corp., analyzed Korean Air, stating, "The valuation discount due to uncertainty over the acquisition of Asiana Airlines can be resolved, but initial integration and normalization costs will be a burden."