HNA buys 23.7% stake in Azul

NOV 26, 2015: China’s expansive HNA Group (Hainan Airlines Company Limited) is continuing its international acquisition strategy with a $450 million investment for a 23.7% stake in Azul, largest airline in Brazil, aiming to benefit from “substantial” passenger traffic between China and Brazil.

Following the stake investment, HNA will be the single largest shareholder of Azul and will appoint new members to the board of directors. Azul, founded in 2008 by David Neeleman (who also founded JetBlue Airways), is the largest airline in Brazil by number of cities served, offering more than 900 daily services to more than 100 destinations. With a fleet of 145 aircraft Azul operates approximately one-third of the daily departures of the Brazilian aviation market.

Bravia Capital, a leading global transportation and infrastructure investment and advisory firm, and UBS Investment Bank served as financial advisor to HNA Group. Seabury Securities LLC, Seabury Group’s investment banking unit, served as financial advisor to Azul.

“HNA Group is committed to expanding in the airline industry through strategic investments in companies with strong market positions and excellent management teams. We are pleased to partner with Azul in order to bring more choice and convenience to our customers traveling to and from Brazil. We eagerly look forward to working with Azul founder David Neeleman and his team for the mutual benefit of both airlines,” said Adam Tan, President of HNA Group.

HNA Group owns the fourth largest airline group in terms of fleet size in the People’s Republic of China, which operates a fleet of 561 aircrafts. HNA is aggressively acquiring aviation assets globally; it just gained European Commission approval to buy 100% of European ground handling company Swissport. HNA has also invested in several other airlines outside of China/Hong Kong, including a share in Comair in South Africa.

David Neeleman, CEO of Azul, said “HNA Group sees in Azul a solid investment with high growth potential. The USD $450 million investment, considering Brazil’s current macroeconomic situation, demonstrates that we have a winning business model and that the HNA Group, as a large investor, has absolute confidence in Azul’s team. Moreover, this investment makes Azul the airline with the highest valuation in the Brazilian market, at more than R$ 7.0 billion.”