American Airlines buys stake in China Southern for $200m

China Southern Airlines Co signed an agreement on Tuesday to sell a minority stake to American Airlines Group Inc for $200 million, in a deal which links top carriers in the Asian and US markets.

China Southern will issue 270.61 million Hong Kong-listed H shares at HK$5.74 (74 cents) per share, or 2.68 percent of the enlarged share capital of the airline, to American Airlines. The price represents a 4.6 percent premium on the previous trading day's closing price.

The deal also means China's three biggest carriers have all tied up with overseas airlines, with Delta Air Lines Inc buying 3.55 percent of China Eastern Airlines Corp in 2015 and mutual stakes bought between Hong Kong's Cathay Pacific Airways and Air China Ltd in 2006.