Asia's aviation markets were stunned when Air China swooped on Cathay Pacific shares, raising the mainland carrier's stake in the Hong Kong-based airline to 29.99 percent.
Air China paid Citic Pacific US$812 million for a 12.5 percent stake in Cathay, adding to the 17.5 share it acquired in a complex deal in 2006 for US$1.5 billion.
Swire also agreed to buy two percent of Cathay for $130 million, increasing its majority holding to 41.97 percent.
Christopher Pratt, Swire and Cathay chairman, told reporters at press conference that the move was expected.
He said Air China's enlarged stake was an outgrowth of the 2006 deal.
Air China will now have more access to the Hong Kong market as it attempts to grow its international network.
The added shareholding in Cathay is another step forward for Air China's global ambitions, given Cathay's dominant position in Hong Kong, one of the world's busiest international transport hubs, the Wall Street Journal Asia reported.
In the 2006 deal, Cathay took full control of Dragonair that had been controlled by Air China's parent. Dragonair has a strong network of routes in mainland China, a key growth market for Cathay.
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