Korean Air overbidding for S-Oil stake

Acquisition unlikely to offer big returns for the carrier, experts say

Korean Air Lines Co.’s takeover bid for treasury shares of S-Oil Corp. may weigh on bottom lines of the air carrier and have limited positive effects, analysts warned.

They are particularly concerned that the stock purchase would not help cut fuel costs as much as expected.

“Savings in fuel cost will not be large,” Ko Min-je, an analyst at Hanwha Securities Co., told The Korea Herald.

“There might be some discounts, but S-Oil cannot supply oil to Korean Air at a discount because it is against the fair trade law.”

Korea Herald