(Yicai Global) July 28 -- China Eastern Airlines Corp., an affiliate of China Eastern Air Holding Co., said that it plans to invest USD439 million (EUR375 million) to purchase a 10-percent stake in Air France-KLM SA [EURONEXT:AF].
An overseas affiliate of the Shanghai-based airline has signed two agreements with Air France KLM about the purchase and future market cooperation. It will also appoint a representative to the board of directors of the European airline.
Delta Air Lines Inc. [NYSE:DAL], which holds a 3.2-percent stake in China Eastern, will also buy a 10-percent stake in Air France-KLM. All three airlines are members of the SkyTeam Alliance.
China Eastern Airlines said that the subscription of Air France-KLM's share depends on several preconditions outlined in a share subscription agreement, so the transaction is uncertain to some degree.
Under the cooperative marketing agreement, the parties will jointly expand their presence in Central Europe, improve customer experience and shorten transit time. The pact will be valid for 15 years.
Air France-KLM is headquartered in Paris, France. It covers 328 destinations in 118 countries.
China Eastern Airlines said this agreement will help it build a closer strategic partnership with Air France-KLM and Delta, and improve the popularity of its brand.