cathay-pacific-and-air-china-finalise-megadeal

Cathay Pacific and Air China finalise megadeal

Far-reaching deal sees the two airlines set up cross-ownership structure while Cathay buys rest of Dragonair for $1.06 billion in cash and shares.
Cathay Pacific Airways and Air China has sealed a wide-reaching operational agreement that will be supported by a cross-shareholding and will see the two airlines essentially work as one in the Greater China region, sources say.

As reported by local media earlier this week, Cathay will also buy out the 82.21% of unlisted Dragon Airlines that is doesnÆt already own from China National Aviation Co, CITIC Pacific and Swire Pacific.

In total, Cathay will pay HK$8.2 billion $1.06 billion for Dragonair, which is equal to an attractive price of 33.5 times its 2005 earnings and will value the company at about HK$10 billion. The payment will be via 90% new shares that will...
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