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SHANGHAI: American Airlines is in advanced talks to buy a $200 million stake in Asia’s biggest airline China Southern, reports said on Thursday, as it looks to get a shoe-in to the country’s huge aviation market.
The Texas-based company plans to take the stake in the Chinese firm’s Hong Kong-listed shares through a private placement, Bloomberg News reported, quoting people familiar with the matter.
China Southern suspended its stocks traded in both Hong Kong and Shanghai on Thursday morning pending a “possible major strategic cooperation”, exchange statements said.
China Southern has a total market capitalisation of HK$15 billion ($2 billion) in Hong Kong, exchange data shows.
American is the world’s biggest airline in terms of revenue
by kilometres flown, while China Southern is the fifth largest and number one in Asia, according to the latest available rankings by the International Air Transport Association.
The move comes as increasing demand for air travel among China’s growing middle class is expected to make it the world’s biggest aircraft market in the coming years.
Published in Dawn, March 24th, 2017
