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China Southern Airlines in discussions to sell stake to American Airlines
GUANGZHOU-based China Southern Airlines, Asia's biggest carrier, has announced that it is in talks to sell a stake to Texas-based American Airlines (AA).
The negotiations are over "a possible major strategic cooperation with American Airlines, involving, an issue of shares and other business cooperation," China Southern said in a stock exchange filing.
Trading in the China Southern Airlines has been suspended since March 23 after Bloomberg News reported that American Airlines will likely make an investment of US$200 million in China Southern's Hong Kong-listed shares through a private placement. AA would nominate an observer without voting rights to the Chinese company's board, according to people familiar with the matter.
The companies haven't reached a binding or definitive agreement, and the cooperation may or may not proceed, China Southern said in its statement.
For American, a deal would strengthen its presence in the Chinese market after rival Delta acquired a minority stake in China Eastern in 2015. China Southern would be the last of the nation's top three airlines to bring in a non-mainland Chinese strategic investor.
An agreement will help boost the expansion plans of China Southern, which indicated in January that it was considering bringing in strategic investors. The carrier has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China.
A tie-up will increase China Southern's visibility in the US, said senior analyst Will Horton at the CAPA Centre for Aviation in Hong Kong.
The negotiations are over "a possible major strategic cooperation with American Airlines, involving, an issue of shares and other business cooperation," China Southern said in a stock exchange filing.
Trading in the China Southern Airlines has been suspended since March 23 after Bloomberg News reported that American Airlines will likely make an investment of US$200 million in China Southern's Hong Kong-listed shares through a private placement. AA would nominate an observer without voting rights to the Chinese company's board, according to people familiar with the matter.
The companies haven't reached a binding or definitive agreement, and the cooperation may or may not proceed, China Southern said in its statement.
For American, a deal would strengthen its presence in the Chinese market after rival Delta acquired a minority stake in China Eastern in 2015. China Southern would be the last of the nation's top three airlines to bring in a non-mainland Chinese strategic investor.
An agreement will help boost the expansion plans of China Southern, which indicated in January that it was considering bringing in strategic investors. The carrier has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China.
A tie-up will increase China Southern's visibility in the US, said senior analyst Will Horton at the CAPA Centre for Aviation in Hong Kong.
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