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Ctrip's Latest China Investment Is Up In The Air

April 29, 2016
Business | Internet

Chinese online travel website Ctrip.com and low-cost airline China Eastern Airlines signed a strategic cooperation framework agreement under which Ctrip promised to invest CNY3 billion to subscribe to non-public offering A shares of China Eastern Airlines.

At present, China Eastern Airlines' valuation is about CNY87 billion. Based on this calculation, Ctrip will hold a 3.45% stake in China Eastern Airlines.

According to the strategic cooperation framework agreement, China Eastern Airlines and Ctrip will focus on cooperation in three major sectors, including business cooperation, equity cooperation, and capital market cooperation.

For business cooperation, Ctrip said that the two parties will work together on IT and tourism product development, technology docking, and business integration so as to provide comprehensive tourism service products to the market. At the same time, the two parties will combine their resources, channels, research and development power, and marketing advantages to implement full cooperation in low-cost travel services and IT services.

Both Ctrip and China Eastern Airlines said that they would explore related cooperation in low-cost airlines, aviation insurance, IT, and e-commerce sectors.

They will also discuss the possibility of cross-shareholdings in due course. Ctrip promised to invest CNY3 billion in private capital to subscribe to non-public offering A shares of China Eastern Airlines.

China Eastern Airlines has a modern fleet of over 550 planes. Depending on its regional hubs like Shanghai, Xi'an and Kunming, the company serves 90 million passengers on a yearly basis.

Tags: airlines | China Eastern | Ctrip.com | e-commerce | e-ticket | Internet shopping | Internet travel | investment | Kunming | online shopping | online travel | private equity | Shanghai | traveler | Xi'an

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