China Eastern completes internal legal procedures for merger plan

China Eastern Airlines (CEA.NYSE; 00670.HK; 600115.SH) has completed the internal legal procedures for its merger plan with Shanghai Airlines (500591.SH) after the plan was approved by the shareholders of both companies Friday. Earlier in September, the restructuring plan of China Eastern and Shanghai Airlines was approved on the employee representative conference convened by the two airlines.

The merger plan will enter its final practice stage after related regulators approve it. Luo Zhuping, board secretary with China Eastern noted that if every thing goes smoothly, the restructuring between China Eastern and Shanghai Airlines is expected to be completed by the end of this year to create a new China Eastern that will take half the market share in Shanghai.

So far, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and the State Administration of Foreign Exchange (SAFE) have nodded the merger plan.

But the plan is yet waiting for the approval from China Securities Regulatory Commission (CSRC), according to Liu Shaoyong, China Eastern Airlines Chairman.

He said that his company expects to get approval of its merger plan with Shanghai Airlines from the securities regulator before the end of this year.

Analysts pointed out that as the merger plan has received strong voter approval from the meetings of shareholders and employees, it shows that both the internal and external sides of the airlines are optimistic over the outlook of the new China Eastern after the merger.

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