China National Aviation Holding Co (CNAHC) purchase of more stocks of China Eastern Airlines Corp (China Eastern) is to be decided by the market, in particular by the stock price, said CNAHC general manager Li Jiaxiang yesterday, according to today's Shihua Financial Information.
CNAHC dropped its acquisition plan over China Eastern Airlines Corp (China Eastern) last month due to its high stock price, said Li at a sideshow to the opening of the 17th CPC National Congress in Beijing on Monday.
"China Eastern's stock price is too high, so we gave up the plan." said Li.
Last month, both Cathay Pacific Airways and Air China pulled out of bidding for China's third biggest carrier, China Eastern. CNAHC is parent to Air China.
Analysts familiar with the matter said the decision was a possible result of political pressure, because the Chinese government has already approved the Singapore deal.
Singapore Airlines and parent Temasek Holdings Pte agreed to buy a 24 percent stake in China Eastern for US$918 million earlier last month, ending talks that had lasted more than a year. The China Eastern shareholder meeting is planned for November.
When asked if Air China is considering acquiring other airlines, such as China Southern Airlines Co or Shanghai Airlines Co, Li said the development trend for domestic aviation industry is toward more mergers and acquisitions. But he would elaborate no further.
On the Shanghai stock market today, Eastern China closed at 18.40 yuan (US$2.45), up 0.16 percent.