
China Eastern Proposes Shanghai Air Takeover
China Eastern Airlines
(CEA) - Get Report
has proposed taking over
Shanghai Airlines
through a share swap,
Dow Jones Newswires
reports, citing a person familiar with the situation.
The deal would finalize the long-anticipated merger between the two struggling state-owned carriers,
Dow Jones
notes. Rumors that China Eastern might merge with Shanghai Airlines or another competitor have been circulating for months.
Under the proposal, China Eastern will raise $1.02 billion via a private placement in both Shanghai and Hong Kong to complete the merger. China Eastern will swap 1.3 of its shares for each Shanghai Airlines share, the person told
Dow Jones
.
The deal offers a 25% share price premium to Shanghai Airlines shareholders. Regulatory approval for the proposed merger is still pending, the report said.