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S Korea's Jeju Air to acquire stake in Eastar Jet for 54.5b won

[SEOUL] South Korean budget carrier Jeju Air said on Monday it would acquire a majority stake in competitor Eastar Jet for 54.5 billion won (S$63.3 million).

The acquisition is the latest case of restructuring in South Korea's aviation industry, which is suffering losses from low travel demand due the coronavirus epidemic and a diplomatic feud between South Korea and Japan last year.

South Korea has the most virus infections outside China, with 4,212 as of Monday.

The final acquisition price is lower than a preliminary deal price of about 69.5 billion won that Jeju Air reported in a December regulatory filing, which was subject to change after due diligence.

A Jeju Air spokesman declined comment on whether the change in the price was affected by the coronavirus epidemic or South Korean airlines' current difficulties.

Jeju Air shares jumped 14 per cent after the announcement.

REUTERS