European Union anti-trust regulators cleared a joint venture all-cargo airline between Hong Kong’s Cathay Pacific and Air China Cargo.
The EU said the deal, under which Cathay Pacific will acquire 49 percent of Shanghai-based Air China Cargo, would not reduce competition between Asia and Europe as their combined market share is “limited” and the routes they operate are largely complementary.
Competition will remain strong after the transaction due to the presence of many large international carriers, the EU’s executive commission said.
Cathay Pacific is paying around $245 million for its stake in Air Cargo China, a unit of Air China.
Air Cargo China operates seven 747 freighters to 14 global destinations and also sells belly space on its parent’s passenger aircraft. The joint venture plans to use proceeds from Cathay Pacific’s investment to buy an additional four freighters.
Under a cross-shareholding deal agreed upon in 2006, Beijing-based Air China has built a 29 percent stake in Cathay Pacific while Cathay owns 20 percent of the Chinese flag carrier.
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