ACQUISITION OF ASIANA AIRLINES

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The acquisition of Asiana Airlines, a deal worth trillions of won, has begun. At least three companies have expressed willingness to become the airline's new owner.

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​The sell-off of Asiana Airlines has begun. Kumho Industrial is trying to keep the deal a secret, but already, three companies revealed they participated in the initial bidding. They are Aekyung Group, the parent-company of Jeju Air; the private equity fund KCGI, which is also the second largest shareholder at Korean Air. Also, Mirae Asset Daewoo and Hyundai Development Company, which filed a joint bid. Jeju Air stands a higher chance of winning the bid as a leading local low-budget carrier and an airline operator. KCGI has vowed to improve Asiana's financial structure as it did with Korean Air. Hyundai Development company is looking to diversify its business areas, and apparently joined hands with Mirae Asset in a bid to solve funding-related problems.

[Soundbite] (STAFF AT HYUNDAI DEVELOPMENT COMPANY(VOICE MODIFIED)) : "We have been considering various items in a bid to diversify our business."

Large conglomerates such as SK, Hanhwa and CJ did not take part. There is also a possibility that several private equity funds might have jumped on the bandwagon. The market reaction was mixed. Aekyung's shares rose slightly, whereas those of Mirae Asset declined. Shares of Hyundai Development Company plummeted nearly 10 percent.

[Soundbite] LEE SANG-HEON(HI INVESTMENT AND SECURITIES) : "Hyundai Development Company specializes in construction. Many doubt that it will manage to produce a synergistic effect by delving into the airline business."

The acquisition of Asiana Airlines is expected to cost between one and two trillion won. Once the candidate is finalized, an examination will be conducted by the end of this month, and the sell-off will be complete by the year's end.