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The minority shareholders of China Eastern Airlines — China’s third-largest air carrier, in which the central government holds a majority stake — voted Jan. 8 against a $918 million (HK$7.16 billion) merger with Singapore Airlines, blocking a bid by Singapore Airlines and Singapore’s sovereign investment fund, Temasek Holdings, to buy a 24 percent stake for 49 cents (HK$3.80) per share.

Nearly all of the owners of China Eastern’s mainland-listed A-shares and more than 70 percent of those holding Hong Kong-listed H-shares vetoed the proposal. Now, China National Aviation Holding Co., the parent company of Air China, is expected to offer at least 64 cents (HK$5) per share for the airline.

The vote is being framed by international media as the latest battle in an ongoing fight between China Eastern’s minority and majority shareholders. However, in reality, this tug-of-war is more about politics than freewheeling economics.

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