HNA Group Co, parent of Hainan Airlines, plans to take stakes in domestic travel services provider Tuniu Corp and Azul Brazilian Airlines, Brazil's third largest airline.
The acquisition plans illustrate HNA's ambitions to expand in both China and the rest of the world.
HNA Tourism Group, one of HNA's subsidiaries, will pay $500 million for a 24.1 percent stake in Tuniu, according to a statement released on Tuesday by HNA Tourism. The deal will make HNA Tourism the largest shareholder of Tuniu.
The two sides also reached a strategic procurement agreement through which HNA Tourism will offer its resources, including airlines, hotels and corporate aircraft, to Tuniu to purchase, according to the statement. The deal is expected to be worth at least $100 million in the next two years.
Tuniu has a large online user base and ranks second in the Chinese mainland's online travel market, HNA said in the statement. HNA sees these factors important.
However, many online travel companies have been losing money lately as they cut prices to fend off competitors. In the third quarter, Tuniu reported a loss of 433.7 million yuan ($67.89 million), more than quadruple its loss of 103.4 million yuan in the same period in 2014.
HNA Tourism doesn't seem greatly concerned about the losses.
"Indeed, HNA also closed some subsidiaries that have performed badly since the financial crisis in 2008," Li Tie, vice chairman of HNA Tourism, told the Shanghai-based Securities Daily. "Generally speaking, HNA has been developing well during recent years."
HNA thinks highly of Tuniu's market position and its executive team's ability to capture more of the market, according to the report.
More importantly, HNA hopes to seek more opportunities in the online travel market by working with Tuniu. Li told the newspaper that HNA won't be able to grab more of the online travel market if it doesn't work with Tuniu.
Currently, Tuniu's rivals are Ctrip International, China's top travel agency, and Alitrip, a subsidiary of e-commerce giant Alibaba Group Holding Ltd.
Under these circumstances, HNA is willing to spend a lot of money for a stake in Tuniu to win market share, even if it has to take a loss in the near term.
HNA also announced on Tuesday it will acquire a 23.7 percent stake in Azul Brazilian Airlines for $450 million. Under the agreement, HNA will become Azul's largest shareholder and will appoint new members to the board of directors, according to HNA's official statement.
HNA and its subsidiaries have announced several multi-million-dollar acquisitions this year as the parent company seeks to expand globally.
For instance, HNA agreed to buy airport luggage services provider Swissport Group from PAI Partners SAS for 2.7 billion Swiss francs ($2.81 billion) on July 30.
On August 31, HNA said its wholly owned subsidiary HNA Investment Holding Co has acquired 30 South Colonnade, a building in London, from KanAm Grund Group, a German real estate investment fund.
On September 7, Bohai Leasing Co, in which HNA holds the majority interest, announced it would acquire a 100 percent equity interest in Avolon Holdings, an international aircraft leasing company, for 2.62 billion yuan ($410.18 million).
"HNA is transforming itself from a single aviation services provider into a company focused on five major industries, including aviation, tourism and logistics," Chen Wenli, vice chairman of HNA, was quoted as saying by the Securities Daily on Wednesday.
When asked about the company's investment strategy, Chen said investment depends on the needs of the company's different subsidiaries, noting that there are no special rules for investment.
