Thomas Cook is seeking a $940 million bailout from a Chinese tourism giant

Struggling tour operator Thomas Cook is in talks with a Chinese tourism giant for a much-needed cash infusion of £750 million ($940 million).

Fosun, a conglomerate with health, leisure and financial interests, owns Club Med and Mattel Theme parks. Fosun already owns 18% of Thomas Cook and would take control of the group’s tour business if the deal is completed. It would also own a significant minority stake in the airline division.

Thomas Cook, a British brand established 178 years ago, is in a perilous position. It will use the money from Fosun to stay liquid through the winter 2019-20 tourism season and invest in the business, the company said in a statement Friday.

The investment would put one of Europe’s oldest tour operators in the hands of a Chinese upstart, which has grown rapidly along with China’s economy.

Thomas Cook’s shares have been nearly wiped out and were down 45% in London trading. Nearly £80 million ($100 million) was wiped off its market value on Monday.

The fresh cash from Fosun could allow it to weather intense competition in the tourism sector and uncertainty around Brexit, which had cut into sales.

The money will also allow it to continue operating the airline division, but the company did not say for how long.

Friday’s announcement caps off talks with Fosun that began last month. It follows similar deals that Fosun has signed in Europe. In 2015, it bought French tourism operator Club Med via a hostile takeover, partially to gain that company’s expertise in operating package tours within Asia.

Fosun and Thomas Cook already run a joint hotel venture in China, where they’re developing Thomas Cook-branded properties in southern China and near Shanghai.

But buying a controlling stake in Thomas Cook should further boost Fosun’s expertise in managing hotels and resorts, analysts said.

“[It carries] a badge of quality or heritage that tends to resonate quite well,” said Richard Clarke, an analyst at research firm Bernstein.

Jim Qian, senior vice president of Fosun, told a tourism conference in Berlin in March that he expects tourism in China to benefit from proposed Chinese government plans to grant workers longer vacations.

Chinese outbound tourism grew 14.7% in 2018, but slowed to around 7% in the last quarter of the year, Qian said. Leisure tourism is the largest market segment in the tourism industry, which accounts for 11% of the Chinese economy.