Beijing: American Airlines Group Inc., the world’s largest carrier, is in talks to acquire a stake in China Southern Airlines Co., according to a statement by Asia’s biggest carrier by passengers.

The negotiations are over “a possible major strategic cooperation with American Airlines, Inc. involving, among others, proposed issue of shares of the company and other business cooperation,” the Guangzhou-based operator said in a stock exchange filing on Sunday. American Airlines spokeswoman Polly Tracey declined to comment.

Shares of China Southern were to resume trading in Hong Kong on Monday. They have been suspended since March 23, after Bloomberg News reported that Fort Worth, Texas-based American will likely make an investment of about $200 million in China Southern’s Hong Kong-listed shares through a private placement. American would nominate an observer without voting rights to the Chinese company’s board, according to people familiar with the matter.

The companies haven’t reached a binding or definitive agreement, and the cooperation may or may not proceed, China Southern said in its statement.

For American, a deal would strengthen its presence in the Chinese market after rival Delta Air Lines Inc. acquired a minority stake in China Eastern Airlines Corp. in 2015. China Southern would be the last of the nation’s top three airlines to bring in a non-mainland Chinese strategic investor. Cathay Pacific Airways Ltd., which is based in Hong Kong, owns about 18 percent of flag carrier Air China Ltd.

Network nature

“All big US carriers will be making deals of one kind or another with major airlines all over Asia and certainly within China,” Robert Crandall, former chairman of American Air, said in a Bloomberg Television interview on Monday. “These things are going to grow and because of the network nature of the airline industry, everybody is going to play and everybody needs to play.”

An agreement will help boost the expansion plans of China Southern, which indicated in January that it was considering bringing in strategic investors. The carrier has been adding routes to Australia, New Zealand and countries in Southeast Asia as it competes with China Eastern and Air China. A tie-up will increase China Southern’s visibility in the US, said Will Horton, a senior analyst at the CAPA Centre for Aviation in Hong Kong.