Global Eagle Entertainment (GEE) has entered into a strategic alliance and an investment agreement with Beijing Shareco Technologies, an affiliate of HNA Group, one of China’s largest conglomerates.
GEE and Shareco plan to create a joint venture (JV) to provide inflight entertainment and connectivity (IFEC) in China and exclusively service aircraft operated by HNA airlines.
Shareco will make an initial primary equity investment in GEE of approximately $103 million, as well as contemplated additional primary and secondary common equity purchases upon the formation of the JV that would bring the total expected investment to $416 million.
Under terms of the contemplated transactions, GEE and Shareco would form a JV to provide IFEC and passenger monetization services to HNA airlines.
GEE would sell its equipment, including its Airconnect antennas, network services and engineering and product support directly to the JV.
The JV would be the exclusive provider of IFEC to HNA aircraft. This fleet comprises more than 320 aircraft today and is expected to grow to over 500 aircraft in the future.
GEE currently operates live connectivity and television services in the Chinese IFEC market, and since 2013, GEE’s Chinese growth program has included investment in a Beijing office, local engineers, partnerships with Chinese media and advertising firms, connectivity trials and teleport infrastructure.
GEE works with all of the Tier-1 telecommunications providers in China and, upon implementation of the JV, expects to be well-positioned in the highly competitive China IFEC market, with the JV having exclusive access to aircraft currently comprising a significant portion of the Chinese commercial aviation market.
Currently, GEE has trial contracts with Shareco to provide services to several airlines within the HNA Group.
Shareco is a Beijing-based company that has developed and implemented an established advertising and passenger monetisation model as the exclusive provider of e-commerce, games, content and advertising solutions to numerous airlines within and out of HNA’s fleet, including Hainan Airlines, Beijing Capital Airlines, Yangtze River Express, Tianjin Airlines and Okay Airways, among others.
Shareco currently provides innovative tablet-based IFEC services to more than 200 aircraft.
Shareco is affiliated with HNA Group, a Fortune Global 500 corporation based in China with a proven track-record of acquisitions and investments in the aviation and travel industries.
Dave Davis, CEO of GEE, said: “The transaction would bring together two industry leaders to accelerate IFEC adoption and improve the passenger experience in China. The completion of our JV with Shareco would accelerate our growth and solidify GEE as a major IFEC provider in the rapidly growing Chinese market.
“We are thrilled to partner with Shareco and HNA Group to drive new revenue opportunities and provide unparalleled connectivity and passenger entertainment products for HNA airlines and the Chinese market.”
Jason Sun, Chairman of Shareco, added: “We are investing in GEE based on its leadership in the mobility space and unique position of offering an integrated suite of connectivity and content products.
“Our investment and strategic alliance will accelerate adoption of inflight connectivity, advertising and e-commerce in the Chinese market and bring a differentiated experience to passengers.”