REGULATOR WARNS AIRASIA ON TAKEOVER OF NOK AIRCategory:News
Update: AirAsia informed the Stock Exchange of Thailand on March 6 that it has withdrawn its offer to purchase Nok Air shares.
BANGKOK — A trade official warned Thursday that aviation giant AirAsia’s proposed acquisition of rival Nok Air may violate antitrust laws.
Though both firms have yet to confirm the deal, Trade Competition Commissioner Santichai Saratawanpad said any merger would require the permission of his office first. An unauthorized merger could be considered a monopoly and subjected to an initial fine of 200,000 baht plus additional fines of 10,000 baht per day, he said.
“The Trade Competition Commission has instructed its agency office to monitor the business merger of these two airlines closely,” Santichai said in a statement. “If we detect any violation of trade competition, we will punish them strictly and immediately in accordance with the laws.”
Santichai said AirAsia’s potential buyout of Nok falls under antitrust regulations because it involves a company with revenues of over 1 billion baht. Monopolies are illegal in Thailand under a 20-year-old law, but not one case has ever been successfully blocked.
In recent days the trade floor at Stock Exchange of Thailand has been awash with speculation about AirAsia’s plans to buy a majority stake in Nok from the Jurangkool family. Nok shares have increased in value by 42 percent since word of the takeover came out last week, up from 2.28 baht to 3.24 baht per share on the Thai exchange.
The Jurangkools own 53 percent of the airline’s shares, while national carrier Thai Airways is its second largest investor with a roughly 16 percent stake.
Operating out of Don Mueang Airport, low-cost carrier Nok Air has reported financial losses for the past several years as it has been beset by chronic delays and pilot strikes. The company released a statement earlier this week denying a takeover was imminent.
“The company would like to clarify that the company has not received any information about the aforementioned investment as reported in the news,” the airline said Monday.
But a statement from Asia Aviation, the owner of AirAsia, confirms it has put an offer on the table.
“The company is deliberating on the viability of the aforementioned investment, but no written agreement has been made, and there has been no action binding the company into buying or selling shares of Nok Air,” the Asia Aviation statement said.
Nok Air reported a loss of 970 million baht in 2018. Asia Aviation said it had net profits of 340 million baht in that year.