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China Southern Agrees On Stock Sale To American Air, Code Share
Photographer: Brendon Thorne/Bloomberg
March 28th, 2017 | 08:48 AM | 832 views
CHINA
China Southern Airlines Co., Asia’s largest carrier by passenger numbers, agreed to sell shares to American Airlines Group Inc. as part of a strategic partnership between the carriers.
China Southern will issue shares in its Hong Kong-listed company to American, the Guangzhou-based carrier said in a stock exchange statement Tuesday, without giving financial details. Fort Worth, Texas-based American Airlines will probably put in about $200 million via a private placement, and nominate an observer without voting rights to the Chinese company’s board, people familiar with the matter said last week.
The two airlines also agreed on code sharing, according to the exchange statement.
The Hong Kong-listed stock closed on Monday at a seven-month high after China Southern confirmed it’s in negotiations with American. The Shanghai-listed shares are scheduled to resume trading Tuesday. China Southern has a market value of about $10 billion.
China Southern would become the last of the nation’s top three airlines to bring in a non-mainland Chinese strategic investor. Cathay Pacific Airways Ltd., based in Hong Kong, owns about 18 percent of flag carrier Air China Ltd. Delta Air Lines Inc. acquired a minority stake in China Eastern Airlines Corp. in 2015.
Source:
courtesy of BLOOMBERG
by Bloomberg News
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