China Eastern Airlines has become China’s first state-owned carrier to diversify ownership of a logistics subsidiary with the sale of a 55% stake to four investors and the subsidiary’s core employees. The Shanghai-based airline aims to compete with US-based cargo carriers such as FedEx, UPS and DHL.

The China Eastern Group will hold a 45% stake in the logistics subsidiary, worth CNY1.8 billion ($270.9 million) in state-owned capital, and attract a CNY2.3 billion investment in non-state-owned capital by selling individual stakes of 25%, 10%, 5%, 5% and 10% to investors Legend Holding Co., GLP (Shanghai) Co., Deppon Logistics, Greenland Financial Holding Co. and core employees of China Eastern’s logistics subsidiary, respectively.

After the deal is completed, the debt ratio of China Eastern’s logistics subsidiary will be reduced from 87.9% to 75%.

Additionally, China Eastern’s logistics subsidiary will organize a new nine-person board of directors comprised of five China Eastern-appointed individuals, three investor-appointed positions and one core employee-appointed member.

China Eastern also said the logistics subsidiary plans to launch an initial public offering as its next step.

Launched in 2012, China Eastern’s logistics subsidiary has a registered capital of CNY1.2 billion and earned an operating profit of CNY567 million last year. In November 2016, China Eastern transferred a 100% stake in the logistics subsidiary to subsidiary China Eastern Equity Investment Ltd. Co. for CNY2.43 billion.

Beijing-based Air China also plans to follow suit with a logistics subsidiary.