Summary: Qatar Airways has sold its entire 9.6% stake in Cathay Pacific Airways for approximately $897 million, marking a complete exit from its eight-year investment in Hong Kong’s flagship carrier. The transaction, executed through a share buyback by Cathay, reflects a strategic portfolio shift by the Gulf airline and underscores Cathay’s efforts to consolidate ownership amid a post-pandemic recovery.
Deal Structure and Valuation
Cathay Pacific confirmed it repurchased the stake at HK$10.8374 per share, representing a 4% discount to its last closing price. The total deal value of HK$6.97 billion (US$897 million) will be funded through internal resources and existing credit lines, according to the airline.
- Qatar Airways originally acquired the stake in November 2017 for $662 million, purchasing it from Kingboard Chemical Holdings.
- The buyback price represents a 35% premium over Qatar’s original investment, signaling a profitable exit.
Strategic Implications
Qatar Airways’ divestment ends its role as Cathay’s third-largest shareholder, behind Swire Pacific and Air China. While the move raised speculation about shifting alliances, both airlines remain members of the oneworld alliance, and no operational changes have been announced.
Cathay Pacific stated the buyback was initiated by Qatar Airways and framed the transaction as a financial decision, not a reflection of strategic divergence.
“This decision is part of a proactive strategy to optimize our investments and position the group for long-term growth,” said Qatar Airways CEO Badr Mohammed Al-Meer in a statement.
Market Reaction and Outlook
Following the announcement, Cathay Pacific shares rose 4.5%, while Air China and Swire Pacific also saw modest gains. Analysts noted that the buyback could strengthen Cathay’s capital structure and simplify its shareholder base as it continues to recover from pandemic-era losses.
Cathay has been gradually rebuilding its international network and cargo operations, with a focus on Asia-Pacific growth and fleet modernization. The repurchase may also signal confidence in its long-term financial health.
In short: Qatar Airways has sold its entire stake in Cathay Pacific for $897 million, concluding an eight-year investment with a 35% return. The move reflects a strategic reshuffling by the Gulf carrier, while Cathay consolidates ownership and signals confidence in its post-pandemic recovery.
Sources: Reuters The Express Tribune, Channel News Asia CNA, Economic Times The Economic Times.
