ANA Buys 8.8% Stake In Vietnam Airlines

ANA and Vietnam airlines announced today that ANA would buy 8.8% share of Vietnam Airlines for $108 million.

ANA Vietnam Air

ANA that is Star Alliance members and Vietnam Airlines member of SkyTeam plan to start codesharing flights between Vietnam and Japan. The airlines also plan find synergies in aircraft maintenance and ground handling.

You can access Bloomberg piece here of which below is an excerpt:

The deal with the operator of All Nippon Airways will close sometime between March and June, Vietnam Air Chief Executive Officer Pham Ngoc Minh said in a telephone interview Tuesday. The two airlines will discuss additional stake sales later, he said.

ANA has been scouting for acquisitions in Southeast Asia since 2013 after raising $1.8 billion in a share sale. A plan to buy a stake in Myanmar’s Asian Wings Airways Ltd. was canceled in 2014.

“We chose ANA since they’re a big, prestigious airline with a large market that does not compete with ours,” Minh said. “ANA’s experience and strengths will help Vietnam Airlines expand.”

Here’s is more from Financial times (access the article here):

ANA’s investment in Vietnam Airlines bears some resemblance to one pursued by Etihad Airways, the Abu Dhabi-based carrier, which has been buying minority stakes in other airlines, partly to secure feeder traffic for its long-haul flights.

For ANA, Vietnam could be an attractive market, with Japanese companies making advances into the country as they seek to reduce their exposure to China.

Direct investment by Japanese businesses in Vietnam more than tripled to $9bn between 2011 and 2014, compared with the previous four years, according to the Japan External Trade Organization.

Conclusion

Lufthansa, Singapore Airlines, Delta, and especially Etihad among others have invested in foreign airlines to form partnerships and strategic investments.

Whether pursuing such a strategy and purchasing 8.8% share of Vietnam Airlines because nothing better was available in Asia-Pacific, remains to be seen.

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