Cathay Pacific has entered into a HK$4.93 billion (US$628.1 million) share purchase agreement to buy 100 per cent of low-cost carrier Hong Kong Express Airways (HKE) from HNA Group – giving it a presence in the ever-expanding Asian low-cost market.
The financial consideration comprises of HK$2.25 billion in cash and a non-cash component of HK$2.68 billion. It is set to be finalised on or before 31 December 2019, when HKE will become a wholly owned subsidiary of Cathay Pacific.
The deal is subject to completion and conditional upon certain conditions being fulfilled, including clearances required from relevant competition authorities, consents under relevant contracts of HKE and the termination or variation of certain arrangements between HKE and its related parties.
Cathay Pacific said: “The Transaction is expected to generate synergies as the businesses and business models of Cathay Pacific and HKE are largely complementary. The Transaction represents an attractive and practical way for the Cathay Pacific Group to support the long-term development and growth of its aviation business and to enhance its competitiveness.
“It is intended to continue to operate HKE as a standalone airline using the low-cost carrier business model.”