American Airlines might be spending some serious cash in China.
People familiar with the matter told Bloomberg that American Airlines is reportedly in advanced talks to invest $200 million in China Southern Airlines at a valuation of $10 billion.
According to the publication, American's investment in the airline's Hong Kong-listed shares will reportedly buy it a non-voting seat on China Southern's board.
American's perspective investment in China's largest airline makes an incredible amount of sense.
Fort Worth, Texas-based American is a member of the Oneworld airline alliance that does not currently have a mainland Chinese member airline. (Cathay Pacific is based in Hong Kong.) With China Southern's vast network in the fold, American will now hold a much more attractive position in the lucrative Chinese market.
This isn't the first time a US airline has invested heavily in China's airlines. In 2015, Delta purchased a 3.55% stake in China Eastern Airlines for $450 million.
American Airlines declined to comment.
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