Delta and China Eastern have each purchased 10% of Air France-KLM. While Air France-KLM has purchased Virgin Group's 31% stake in Virgin Atlantic.
Delta Air Lines and China Eastern have announced that they have each purchased 10% of Air France.
Delta and China Eastern's stake in Air France-KLM comes in the form of new shares from capital increases valued at $875 million.
In addition, Air France-KLM has agreed to purchase the Virgin Group's 31% stake in Virgin Atlantic valued at $287 million.
"A dynamic global landscape means it’s more important than ever for Delta to deepen ties with our global partners to provide opportunities for mutual growth," Delta CEO Ed Bastian said in a statement. "Bringing together the strengths of Delta, Air France-KLM and Virgin Atlantic into a combined joint venture will create the trans-Atlantic partnership of choice for customers."
Air France-KLM formed following a 2004 merger that saw the national airlines of France and the Netherlands come together to form one of the largest carriers in Europe.
In 2012, Delta acquired a 49% stake in Virgin Atlantic Airways from Singapore Airlines in a deal worth $360 million.
In 2015, Delta acquired 3.55% of China Eastern Airlines for $450 million.
Last week, Air France announced the launch of Joon, a boutique, millennial-focused airline that's it hopes will put the company in a better position to compete globally.
"Delta is the first major US carrier to understand that the international airline market is now about today, but about the strategic investments in the future," Airways senior business analyst Vinay Bhaskara told Business Insider.
Overall, Bhaskara believes the deal is a win-win for all parties involved. The deal creates a metal-mutual joint venture with the greatest collection of trans-Atlantic mega hubs in the business — New York, Atlanta, London, Amsterdam, and Paris.
This story is developing.
Delta and China Eastern have each purchased 10% of Air France-KLM. While Air France-KLM has purchased Virgin Group's 31% stake in Virgin Atlantic. Read Full Story
Facebook
Twitter
Pinterest
Instagram
Google+
YouTube
LinkedIn
RSS