Bradley Perrett Beijing

Unlike most countries of its size, when South Korea wants to build a military aircraft locally, it has two aerospace manufacturers to choose from.

In an increasingly concentrated global industry, this state of affairs has perhaps been unnatural. So it is not surprising that one of the companies, Korean Air Lines, has long wanted to buy the other, Korea Aerospace Industries (KAI).

The quarry has evaded its hunter for nine years. But with an outgoing presidential administration keen to sell its stake in KAI before leaving office in February, the company's number may finally be up.

Or maybe it is not. Originally the only bidder, Korean Air finds that Hyundai Heavy Industries has made a surprise competing bid for KAI. Definitive bids should be lodged in November after a month of due-diligence investigations of KAI, which now seems certain to lose its independence. Its managers must be hoping for the company to become a unit of Hyundai Heavy, since KAI and Korean Air's Aerospace Div. have a reputation in the industry for loathing each other.

The defense ministry is also probably hoping that Hyundai Heavy wins, to preserve competition in a country that tries harder than most to spend its defense budget at home.

Hyundai's reason for bidding for KAI is unknown, but the government reportedly urged it and other conglomerates to do so. They were reluctant because of widespread complaints that they already own so much of the economy. It is not hard to imagine Hyundai wanting to emulate Japanese heavy-industry companies that have aerospace divisions.