Delta To Buy 3.55 Pct China Eastern Stake

July 27, 2015

Delta Air Lines has agreed to buy a stake of about 3.55 percent in China Eastern Airlines for USD$450 million, the Chinese carrier said.

Delta will purchase 465.91 million H-shares of state-owned China Eastern as part of a subscription agreement for HKD$3.489 billion (USD$450.17 million). The two airlines are partners in the SkyTeam alliance and already have a codesharing agreement.

"Delta's relationship with China Eastern is long-standing. We share a vision that will create the most profitable, enduring franchise between the US and China," Delta chief executive Richard Anderson said in a statement.

The deal still needs to be approved by the boards of both companies.

Earlier this month, China Eastern, one of China's big three airlines, said it expected net profits in the first half of the year to have risen to CNY3.7 billion yuan (USD$596 million) from CNY14 million a year earlier on lower fuel prices and robust travel demand.

(Reuters)