American Airlines Group Inc agreed to acquire a minority stake in China Southern Airlines Co for US$200 million, cementing a partnership between the top carriers in the US and Asia.
China Southern will issue 270.6 million shares in its Hong Kong-listed company to the world’s largest airline at HK$5.74 apiece, the Guangzhou-based carrier said in a stock exchange statement Tuesday. That is a premium of 5.3 per cent over the closing price before Bloomberg News reported the talks last week. The two airlines also agreed on code sharing, according to the exchange statement.
American Air will hold 2.68 per cent of China Southern’s total issued shares, Asia’s largest carrier by passengers said in the filing.
The agreement will boost Fort Worth, Texas-based American Air’s presence in China, one of the world’s fastest-growing aviation markets that the International Air Transport Association predicts will surpass the US to become the biggest in terms of passengers by 2024. The deal will also help the expansion plans of China Southern, which indicated in January that it was considering bringing in strategic investors…
