Cathay Pacific to acquire budget airline HK Express for $4.93b

If the acquisition goes through, Cathay Pacific would control three of Hong Kong’s four passenger airlines.

Cathay Pacific Airways has entered a deal to acquire budget airline HK Express for a total consideration of $4.93b, an announcement revealed.

The total consideration comprises of a $2.25b cash component, and a non-cash component of $2.68b. The transaction is expected to complete on or before 31 December 2019 by when HKE will become a wholly owned subsidiary of Cathay Pacific.

The transaction is expected to be good for the travelling public, good for the Hong Kong hub and good for the Cathay Group, the announcement noted.

“The Transaction represents an attractive and practical way for the Cathay Pacific Group to support the long-term development and growth of its aviation business and to enhance its competitiveness. It is intended to continue to operate HKE as a standalone airline using the low-cost carrier business model,” Cathay Pacific said in a statement.

As at 31 December 2018, the net asset value attributable to the HKE Interest was approximately $1.12b.