Cathay Pacific is buying back the 9.57% stake in the Hong Kong-based carrier that’s owned by Qatar Airways for HK$6.97bn ($896 million, and about a 3.9% discount to the stock’s prior close).
- Qatar acquired the ownership interest in 2017, and no reason was given for the exit.
- By cancelling these shares, Swire Pacific will own 47.7% of Cathay Pacific, and Air China’s stake will be 31.8%.
My first thought with a state actor (Qatar) divesting its stake in what’s increasingly become a Chinese state-controlled carrier is that this is geopolitical. And there are certainly forces at work in the background there. But I’m struggling to find a strong narrative.
Cathay has been tidying its capital structure since it bought back the Hong Kong government’s pandemic warrants and preference shares last year, and Cathay and Qatar ties have deepened this year with expanded codesharing.
Retiring a foreign state’s 10% ownership does give greater local control to a strategic asset, and that is looked favorably on by the mainland government.
At the same time, Qatar Airways has been shifting focus, more recently deepening ties with Virgin Australia (25% stake, joint venture and wet least). Exiting a passive, non‑influential 10% in Cathay to fund nearer‑term strategic priorities makes sense. Still, the fact that they’re silent on motive creates space for speculation.
China – Qatar ties remain broadly strong, though. Qatar has significant U.S. ties, but did receive approval to buy 10% of China Asset Management this year. And selling the shares at a discount makes it seem like Qatar was the motivated seller, rather than Chinese interests pushing them out. Qatar’s IAG stake (British Airways, Iberia, Aer Lingus, Vueling) is far more strategic for them.
