Airline China Eastern announces merger terms

BEIJING, July 12 (Reuters) - China Eastern Airlines (600115.SS) (0670.HK) will swap 1.3 of its shares for one share of Shanghai Airlines (600591.SS) as part of a long-anticipated merger, the company said in a statement late on Sunday.

Trading in China Eastern, suspended since last week, will resume on Monday, it said.

The terms are in line with a report by the Shanghai Securities News on Thursday. [ID:nSHA336307]

Shanghai Airlines will become a wholly-owned subsidiary of China Eastern while retaining its brand and independent operation, Xinhua news agency said late on Sunday, citing Liu Jiangbo, spokesman of the team overseeing the tie-up.

The two money-losing carriers have been grappling with weak air travel demand as China's economy slowed.

The merger will give China Eastern, one of China's three state-owned airlines, about a 50 percent market share in Shanghai, the wealthy coastal city that is China's financial centre. (Reporting by Lucy Hornby; Editing by David Holmes)