Asiana M&A Enters New Phase... Will Face-to-Face Negotiations Between CEOs Succeed?

Kumho Industrial Holds Internal Meeting Amid Concerns
Industry Says "Even If Accepted, Disagreement Over Reinspection Remains, Seen as Justifying" Pessimism Also Present

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Je-hoon] The merger and acquisition (M&A) of Asiana Airlines, which was on the brink of collapse, has entered a new phase. HDC Hyundai Development Company has made a counterproposal for a 'face-to-face negotiation between CEOs.' As a result, the final collapse of the acquisition battle scheduled after the 12th has been somewhat postponed, but since disagreements over the key issue of 're-due diligence' remain, it is difficult to predict the outcome.

According to the aviation industry on the 10th, Kumho Industrial held an emergency management committee meeting that morning to discuss HDC Hyundai Development's proposal for a face-to-face negotiation between CEOs. After a prolonged ping-pong game with Kumho Industrial and creditors, HDC Hyundai Development accepted the request for face-to-face talks and presented the card of CEO-level negotiations the day before.

Currently, it is expected that Kumho Industrial, which has taken over the ball, will conditionally agree to the negotiations. An industry insider said, "There is no reason not to meet, but challenges such as re-due diligence remain," adding, "With the deal closing date fixed on the 12th approaching, a decision will be made soon."

If face-to-face negotiations begin, re-due diligence is expected to emerge as the biggest challenge. HDC Hyundai Development previously expressed willingness to conduct about 12 weeks of re-due diligence followed by renegotiation of acquisition terms, whereas Kumho Industrial and the creditors have maintained that sufficient acquisition-related information has already been provided, making further due diligence unnecessary. However, Kumho Industrial and the creditors have partially agreed to a re-examination on the premise of confirming the acquisition.

For this reason, even if HDC Hyundai Development's proposal for CEO-level face-to-face negotiations is accepted, some interpret it as merely a step to build justification. Previously, HDC Hyundai Development and Kumho Industrial exchanged statements blaming each other for responsibility. An industry insider said, "If the contract ultimately falls through, it is natural that a legal battle over the contract deposit of 250 billion won will ensue," adding, "Both sides are likely to exchange arguments to minimize their own responsibility."

This content was produced with the assistance of AI translation services.