SEOUL (Reuters) -An Asiana Airlines board meeting on whether it should accept a proposal by prospective buyer Korean Air Lines to sell its cargo service in response to EU antitrust concerns has ended without conclusion, a company spokesperson said.
Shares in South Korea’s Asiana rose as much as 24% earlier on Monday on expectations its proposed merger with Korean Air would proceed as board members met to discuss the sale of the cargo operations. The stock later pared gains to close up 7.1%.
The board is expected to meet again, but the Asiana spokesperson did not give a date.
Before Asiana held its board meeting to deliberate the sale, a board member resigned for an unspecified reason, the company confirmed.
“A lot of internal conflict is expected – the decision is expected to be sharply contested,” said Um Kyung-a, an analyst at Shinyoung Securities.
“But if it does not lead to a sale, they will have to find another way to get approval from the EU or other countries, which is not easy and will take time.”
Reuters reported earlier this month that Korean Air would offer to sell Asiana’s air cargo business and divest routes to four EU cities in a bid to gain EU antitrust approval for acquiring its rival.
Korean Air planned to submit the package to the European Commission by the end of October, although the timing could still slip, a source familiar with the matter told Reuters earlier this month.
(Reporting by Ju-min Park, Heekyong Yang and Joyce Lee; Editing by Ed Davies and Jan Harvey)