Korean Air to buy Asiana, emerges as world's 10th-largest airline

Korean Air Lines will buy its smaller local rival Asiana Airlines in a deal valued at 2.5t won (US$2.3b) that would create the world's 10th-biggest airline by fleets, industry sources said Monday. Korean Air will sell new shares worth 2.5t won to finance the deal, with its parent Hanjin KAL Corp. injecting 800b won, according to the sources. Korean Air, currently the world's 18th largest, will buy a 30.77% stake in Asiana Airlines from the smaller carrier's creditors led by the state-run Korea Development Bank (KDB). The KDB plans to invest 500b won in shares to be issued by Hanjin KAL and 300b won in the company's convertible bonds. Hanjin KAL is expected to submit a letter of intent to the KDB early this week to proceed with the deal. The majority Asiana stake is held by Kumho Industrial, an affiliate of airline-to-petrochemical conglomerate Kumho Asiana Group.<br/>