Korean Air discloses Asiana acquisition advisory fees, gripes

Korean Air Lines' Boeing 787-9 [KOREAN AIR LINES]

Korean Air Lines has paid over 100 billion won ($75.73 million) in advisory fees in the acquisition of Asiana Airlines, a deal that has faced scrutiny from regulators globally for possible antitrust violations.

The airline complains of "excessive corrective measures" being advised by some authorities in the course of the deal being evaluated for its effect on competition, though the company has not identified which countries are making the demands and what requests it considers excessive.

Korean Air Lines has applied for merger review with a total of 14 regulators, at home and abroad, since January 2021. So far, 11 jurisdictions have approved the plan, with decisions from the United States, the European Union (EU) and Japan pending.

The airline is now making its final push.

“We are making every effort, utilizing all our available resources, to win antitrust review approval from overseas governments,” Korean Air wrote in a press release on Monday.

“We have actively responded to this process by investing over 100 billion won for advice from domestic and overseas law firms and in advisory fees, spanning more than two years from December 2020 to February of this year,” it added.

In Korea, it is uncommon for companies pursuing acquisitions to disclose advisory fees.

Prior to this, Korean Air had publicly disclosed paying 350 billion won in advisory fees in May 2020, putting total outlays on M&A advice since then at 650 billion won.

“We have a dedicated team of experts for each country — five teams and over 100 members — developing tailored strategies,” Korean Air Lines wrote. “We are actively responding to the demands of competition authorities in various countries by contracting with domestic and foreign law firms and economic analysis experts.”

Japan will likely announce its decision in the first half and the EU in August, according to Korean Air Lines. The U.S. is expected to reach a conclusion later than these countries.

“We believe that the acquisition of Asiana Airlines is the only way to sustain and develop the domestic aviation industry's global competitiveness," stressed Korean Air. “We are actively presenting reasonable alternatives and opinions in response to excessive corrective measures requested by some antitrust regulators, and are putting in maximum effort to ensure that the long-term competitiveness of the industry is not damaged.”

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]