Air China moves to block China Eastern's Singapore deal
Air China may try to block Singapore Airline’s plan to buy a stake in China Eastern Airlines to protect its market position, the 21st Century Business Herald reported. China Eastern controls a 50% share of the lucrative Shanghai air market. Air China, which holds 11% of China Eastern’s Hong Kong-traded shares, may try to rally support from other shareholders to block the Singapore Airlines deal, which requires approval from two-thirds of all minority investors. China Eastern agreed to sell a 24% stake for US$918 million to the Singaporean carrier and Temasek Holdings on September 2, and the offer has been approved by the State Council. Meanwhile, the Wall Street Journal reported that Cathay Pacific Airways was positioning itself to buy a stake in China Eastern Airlines, which could also could halt the Singapore Airlines deal. An unnamed source said Cathay Pacific would make an announcement after the Hong Kong market closed today. Cathay Pacific and Air China are closely linked, each owning 17.5% of each other's shares. A China Eastern official said the airline has not received any offer from Cathay Pacific.