DAL Delta Air Lines Inc

Delta Air Lines Inc. agreed to acquire a 3.55% stake in China Eastern Airlines Corp. for $450 million as part of an agreement that expands the two carriers' strategic partnership.

Under the agreement, Delta will acquire roughly 10% of China Eastern's H-shares, which are listed in Hong Kong, and an observer seat on China Eastern's board.

China Eastern earlier on Monday said it will raise 3.5 billion Hong Kong dollars ($451.6 million) by issuing shares in Hong Kong.

China Eastern, with its Shanghai Airlines subsidiary, and Delta currently operate codeshare flights as well as a number of direct flights between the two countries.

Write to Tess Stynes at tess.stynes@wsj.com

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