It is predicted that Hyundai Heavy Industries Co. has bigger synergy effect in acquisition than Korean Air Lines Co. while two companies are competing to take over Korea Aerospace Industries Ltd.

According to Korea Exchange early this month, Korean Air went through drop in stock prices more than 3%(Hyundai Heavy was around 1%) as of 28 September, when their preliminary bid was submitted.

The market expects the sale price to reach maximum 1,500 billion-won. The higher the selling price, the more Korean Air is likely to give up considering the company's comparatively weaker financial position.

"Korea Aerospace might have a positive outlook on Hyundai Heavy in terms of using their vessel engineering technology and global marketing networks as well as better position in financial soundness." said an analyst in Woori Investment & Securities Co.

Korean Air's abandonment would rather have a positive impact on their stock price, which possibly means that the company would be able to get away from uncertainty as Hyundai Heavy stands a better chance of acquisition.

The analyst says the government, which is a principal agent of the selling, wants the bidder to be willing to pump hundreds of billion-won into Korea Aerospace every year. In this respect, Korean Air has less chance of winning the bid due to huge debt.

The level of Korean Air's reliance on debt was 67.56% at the end of June, almost 3 times higher than 26.63% of Hyundai Heavy. So is the debt ratio as Korean Air shows 828.98% whereas Hyundai Heavy is just 168.95%.

There is still no way of knowing who will be the winner in the bidding.

"It has been said from the beginning of the year that Hyundai Heavy will take part in the bidding for Korea Aerospace, however, nothing has been written about it on the report." said another analyst.

As regards the selling schedule, the evaluation of preliminary bids submitted by Hyundai Heavy and Korean Air is to be made and accordingly due diligence will be conducted within this month.

Then there will be a final bid and a contract for buying and selling of stocks in November. The target volume of stocks to be sold is 40.7 million shares accounting for 41.75% of Korea Aerospace's whole issued stocks.