Exclusive: EU regulators to probe Korean Air, Asiana deal -sources

BRUSSELS, Feb 9 (Reuters) - Korean Air Lines' (003490.KS) planned takeover of Asiana Airlines (020560.KS) is expected to face a full-scale EU antitrust investigation because of concerns about the merged entity's market power, people familiar with the matter said.

The proposed acquisition, announced in late 2020 and one of the first major deals in the aviation industry since the COVID-19 pandemic, would see Korean Air become the top shareholder of indebted Asiana.

The European Commission is set to open a four-month long investigation into the deal following the end of its preliminary review on Feb. 17, the people said.

The EU antitrust watchdog and Korean Air declined to comment.

The EU competition enforcer's concerns focus on four routes to Barcelona, Frankfurt, Paris and Rome and air passenger and air cargo services, the people said, indicating that Korean Air will likely have to cede airport slots to rivals.

South Korea's antitrust enforcer gave conditional approval last year subject to Korean Air giving up slots and traffic rights for 26 international and 14 domestic routes in the next 10 years if a newly competing airline requests them.

The UK competition agency is now examining Korean Air's proposal to help a rival get a foothold on the London-Seoul route.

Reporting by Foo Yun Chee; Editing by Susan Fenton

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