Qatar Airways buys 9.6% stake in Cathay Pacific
06 Nov 2017 - 18:59
Doha: Qatar Airways has bought a stake in Cathay Pacific, it announced Monday, giving the Doha-based airline a toehold in the potentially lucrative Asian aviation market.
The state-owned carrier said it had acquired a 9.6 percent stake in Cathay, which would make it the third largest shareholder in the Hong Kong airline.
Bloomberg News said the deal was worth $662 million (570 million euros).
Qatar Airways group chief executive Akbar Al-Baker said in a company statement that Cathay was "one of the strongest airlines in the world", adding it had "massive potential".
The deal with Cathay Pacific also comes after Qatar Airways halted a bid in August to buy a 10 percent stake in American Airlines.
Corrine Png of Singapore-based research firm Crucial Perspective described the acquisition as a "trophy win" for Qatar Airways.
Hong Kong conglomerate Swire Pacific owns 45 percent of Cathay, state-owned Air China has 30 percent and the rest is publicly traded.
Qatar Airways bought the shares from Hong Kong's Kingboard Holdings, according to a stock exchange filing by the company, which makes circuit boards and invests in property.
Cathay, which last year reported its first annual loss in nearly a decade, is carrying out a three-year corporate overhaul that includes laying off hundreds of workers as it battles to keep up with intensifying competition from rival Asian carriers.
The investment adds to Qatar Airways' overseas portfolio. The company also owns 20 percent of International Airlines Group, which controls European carriers Aer Lingus, Iberia and Vueling; 10 percent of Chile's Latam Airlines Group; and 49 percent of Meridiana, Italy's second-biggest carrier.