Jan 22, 2019 (China Knowledge) - China Eastern Airlines is reportedly looking to divest from a controlling stake in its affiliated travel agency Shanghai Airlines Tours International, with real estate giant Greenland Group; which is said to be in a leading position to take over the stake.
Other companies that have expressed interest in the deal include Wanda Group, Hainan Airlines and Fosun International. China Eastern currently holds a 65% stake in Shanghai Airlines Tours International and is looking for a cash deal for the takeover.
Greenland in recent times has been looking to make an entry into the tourism and hotels sector from its traditional property markets and Shanghai Airlines Tours has the potential to help Greenland make a breakthrough due to its strong reputation and brand awareness.
Last year, Greenland Group went through a restructuring to form three business groups focusing on large-scale infrastructure, business and trade, as well as hotels and tourism.
Greenland plans to build an industrial ecosystem focusing on hotels, travel and exhibitions to build a core tourism operation and hotel management business, targeting to reach an annual revenue of RMB 20 billion over three years.
Many real estate developers have been diversifying into other businesses recently amid a more challenging housing market in China with culture and tourism being a popular diversification destination.
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