Delta Ups Stake In Korean Air Parent

Delta Air Lines Inc DAL has increased its stake in Hanjin KAL Corp., parent company of Korean Air Lines, to 9.21%.

Delta announced in June the acquisition of a 4.3% stake in the parent company, with plans to increase that holding to 10% to thwart a local activist fund's challenge. The U.S. airline did not disclose how much it paid for the 4.3% stake, worth about $88 million at the time of purchase, the name of the seller or the timetable for increasing the stake to 10%.

At the end of July, Delta held a 5.13% stake in Hanjin KAL, and the U.S. carrier has acquired additional shares on the open market.

Korean Air penned a joint venture agreement with Delta in 2018, aimed at collaborating on robust trans-Pacific routes

Delta announced in a June press release plans for "growing its international footprint and leveraging partnerships with key airlines in regions around the world, including through joint ventures and equity investments." Delta also owns stakes in Grupo Aeromexico, Air France-KLM, China Eastern, Brazil's Gol and Virgin Atlantic and has been negotiating a stake in Alitalia.

Hanjin KAL, controlled by the Cho family, is the largest shareholder in Korean Air, with a holding of about 29%, with activist investor Korea Corporate Governance Improvement Fund (KCGI) holding a stake of almost 16%. The National Pension Service is the third-largest shareholder with a 6.64% stake in the company.

In April, Cho Yang-ho, chairman and chief executive officer of Korean Air and chairman of the Hanjin Group, suddenly died at age 70, weeks after shareholders decided to end his 27-year tenure on the airline's board in a show of growing shareholder activism in Asia's fourth-biggest economy that has long been dominated by family-owned conglomerates (chaebols).

Image Sourced from Google