Air China denies claims of takeover talks with Cathay Pacific

Airline Industry Information, March 16, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Air China Ltd has denied claims that it is in talks to take over Cathay Pacific Airways, based in Hong Kong.

An unnamed senior executive of Swire Pacific Ltd, a trading house and main shareholder of Cathay Pacific, had said that the company was close to finalising an agreement with Air China to sell Cathay Pacific, according to the South China Morning Post. Swire reportedly holds a 45% stake in the airline and a 10% stake in Air China.

The newspaper also reported that, as a part of the agreement, Cathay Pacific would first buy its local competitor Hong Kong Dragon Airlines Ltd and then be included as a part of the mainland group. The newspaper also pointed out that if Swire was willing to accept shares in Air China for its stake in Cathay Pacific it would become the largest single shareholder in Air China.

A spokesman for Air China has however denied the report, saying that it is only speculation, The Associated Press reported.

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