Singapore Airlines (SIA) and the state investment company Temasek Holdings have signed a definitive deal to buy a combined 24 percent stake in China Eastern Airlines (CEA), SIA said on Friday.
SIA, the city-state's national airlines, said in a statement it would pay 4.7 billion HK dollars (about 800 million U.S. dollars) for a 15.73 percent stake in China Eastern, one of China's top three air carriers.
Temasek is set to spend 315 million U.S. dollars to own 8.27 percent of the Shanghai-based carrier.
The price payable by SIA and Temasek is 3.8 HK dollars per H-share.
Separately, CEA Holding will represent 51 percent of the enlarged issued share capital of CEA.
The statement said SIA will nominate two directors, chairman Stephen Lee and chief executive officer Chew Choon Seng, to a 14-member board of CEA. It will also send its personnel to certain executive positions in CEA.
"SIA will work with CEA to implement best practices in corporate governance standards, improve operational efficiency and performance, raise product and service standards, and enhance the brand identity and image of CEA," the statement said.
Under the strategic cooperation agreement, SIA and CEA will pursue opportunities for cooperation in marketing, commercial purchasing, technical and engineering cooperation, flight operations, ground and station operations, and human resources andtraining, said the statement.
SIA and Temasek announced the initial strategic investment in CEA in September, while Air China and Cathay Pacific later indicated willingness to purchase share rights of CEA in an effort to block the cooperation between SIA and CEA. But the latter abandoned late in September.
SIA said the final deal will be subject to approval by the shareholders of CEA and the relevant regulatory authorities.