US/China: Delta to buy stake of China Eastern for $450 million

Delta Air Lines has agreed to buy 3.55 percent of China Eastern Airlines Corp, a move that would make it the first US carrier to own part of a Chinese airline.

The deal may prompt Delta’s rivals to beef up partnerships with Chinese carriers in an effort to secure their place in a country that Delta expects to become the biggest market for travel from the United States.

Delta’s purchase challenges rival United Continental, the leading US airline for service to China. United Chief Executive Jeff Smisek said Thursday during an investor call that the airline would be “keenly interested” in exploring a Chinese joint venture once the United States and China negotiate an Open Skies agreement that would ease air route restrictions.

Atlanta-based Delta said it will invest $450 million in China Eastern’s Hong Kong-traded stock, which has nearly tripled over the past 12 months even as broader Chinese stock indexes have plunged.

Full content: The Wall Street Journal

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